China’s future demand for natural gas growth can be great

“Energy Development” thirteen five “plan” proposed in 2020 China’s total energy consumption to be controlled within 5 billion tons of standard coal, of which the proportion of natural gas to reach 10% of the energy structure. If we achieve this goal, the more conservative estimates, China’s natural gas consumption in 2020 will reach 360 billion cubic meters, an increase of 152.2 billion cubic meters than 2016, the average annual growth rate needs to reach more than 15%. Taking into account the current consumption of natural gas, the annual growth rate of 38.6 billion cubic meters will be much higher than the amount of natural gas consumption growth in any year from 2000 to 2016. China’s natural gas demand growth in the past two years is only about 6% per annum, although the first half of this year, natural gas consumption in the government’s strong push to restore double-digit growth. Therefore, to achieve natural gas consumption in 2020 accounted for 10% of primary energy, now appears to be a huge challenge, the need for government policy measures continued strong support.

So, where is China’s natural gas demand space, how is the policy of precision? China’s natural gas consumption has experienced a rapid development in the past decade or so. China’s natural gas consumption in 2000 was only 24.003 billion cubic meters, reaching 205.8 billion cubic meters in 2016, accounting for 5.9% of global natural gas consumption, the scale of consumption in the United States and Russia, ranked third in the world. Natural gas in the primary energy consumption in the proportion of a significant upward trend. However, China’s GDP in 2016 accounted for 6.3% of the primary energy consumption, far below the global average of 23.8%, compared to the United States (30%), Russia (52.8%), the gap is more obvious, which also shows that China’s future demand for natural gas growth Can be great.

At present, China’s natural gas consumption structure, industrial fuels, urban gas (including traffic gas), power generation, chemical industry accounted for 38.2%, 32.5%, 14.7%, 14.6%. Compared with 2010, urban gas, industrial fuel gas accounted for an increase; and chemical and power generation gas accounted for a decline. To achieve the 2020 natural gas development goals, from the expansion of gas scale and optimize the use of two aspects of the structure.

First, industrial gas demand growth. China’s current industrial fuel to coal-based, accounting for 73% in 2015. In 2015, China’s industrial fuel and gas consumption was 73.8 billion cubic meters, and natural gas accounted for about 10% of industrial fuel energy, far below the developed countries (40% -50%) in Europe and the United States. The future development of natural gas in the field of industrial fuels mainly includes two aspects: First, optimize the fuel composition of energy-consuming industries such as steel, metallurgy, building materials and petrochemicals; the other is to improve the fuel structure of different industrial boilers and kilns in the city. For example, if the proportion of China’s natural gas consumption to industrial fuel consumption will increase to 15% by 2020, the average annual demand for industrial fuel gas will exceed 10%.

Followed by the increase in the size of the city gas and the development of natural gas vehicles. Since the beginning of the 21st century, China’s urban gas has maintained rapid growth, with an average annual increase of 55 million in the population in 2004 and 2015. Since 2012, the gas population surpassed liquefied petroleum gas (LPG), and urban gas became the largest living fuel. China’s urban gas consumption in 2015 is about 31.1 million people, urban residents gasification rate of 43%, but still far below the level of developed countries (90% of the United States, the United Kingdom 85%). On the other hand, China’s per capita gas consumption is now about 27 cubic meters, only the United States and the United Kingdom per capita consumption of 1/16 and 1/28 (US per capita gas 428 cubic meters, the United Kingdom 752 cubic meters), so the future of China City gas gas demand potential is still huge.

China’s traffic gas to car-based gas, the ship with little gas. 2015 natural gas car ownership of about 5 million, with more than 20 billion cubic meters of gas. As a result of the policy support for natural gas vehicles, China’s natural gas car ownership and gas consumption are living in the forefront of the world, but the past two years the slow pace of development of natural gas vehicles.

Again, the demand for natural gas power generation can be greatly improved in the short term. China’s natural gas power generation in 2015 was 28.4 billion cubic meters, up 12.2 percent over the previous year, and demand for gas production increased rapidly. As of the end of 2015, China’s gas and electricity installed capacity of 06 million watts, natural gas power generation accounts for 3% of the total electricity consumption, while the global average of 21.6%, the proportion of the United States 32%. In addition, China’s gas consumption accounted for the proportion of natural gas consumption is also low, only 14.7%, far below the world average of 30%, while the United States more than 30%, more than 40% of Russia, Japan and even reached about 60% The

Objectively, China’s clean development of electricity also requires the peaking of natural gas. At present, China’s power surge is mainly dependent on the coal, but the natural gas power plant is the ideal peak shunt power supply, power grid to enhance the efficiency of the system and the need for renewable energy consumption need to increase the proportion of natural gas power. “Electric power development” thirteen five “plan” proposed natural gas power generation construction goals, by 2020 to achieve gas and electricity installed capacity accounted for more than 5%, the scale of more than 110 million kilowatts. Another factor in the scale of natural gas power generation is the annual utilization of hours. 2015 China’s average utilization of gas units only 2498 hours, assuming that the average annual utilization of gas units in 2020 can be increased to more than 3000 hours, gas scale will be greatly improved. If the planned total demand of 36 billion cubic meters of natural gas to estimate, natural gas demand in natural gas consumption in the proportion may be close to 18%. Natural gas power generation demand will be the key and driving force for China’s future natural gas growth.

Finally, the demand for chemical natural gas is likely to shrink. China’s chemical gas consumption in 2015 was 28.2 billion cubic meters, down 6.5% year on year. In recent years, chemical gas growth is weak, the proportion of total natural gas consumption continued to decline. However, with the world’s major developed countries compared to the proportion of chemical gas is still high. Fertilizer, methanol and hydrogen are the main consumption of chemical gas. From the “Eleventh Five-Year” at the end of the rise in costs led to reduced demand for fertilizer and methanol gas. It is estimated that the share of chemical demand in natural gas consumption in 2020 is likely to fall to about 7%, which is close to the current 5% share of natural gas consumption in the world’s major natural gas consuming countries.

In the environmental management and energy structure adjustment under the dual pressure, at least from the consumption point of view, natural gas will be China’s short-term growth of the fastest varieties of energy. The above analysis shows that China’s natural gas demand growth is very large, however, due to the current natural gas and coal use there is a relatively large cost difference, short-term natural gas development can only rely on government policy for mandatory gas replacement coal. After 2020, short-term natural gas growth needs to be supported by the government, including accelerating the reform of the natural gas industry and the reform of the price mechanism. In addition to supporting the need to create demand, the government needs to support the protection of supply.