China Petroleum Corporation Economic and Technological Research Institute (hereinafter referred to as “PetroChina Economic Research Institute”) released in Beijing on January 16, the “Development Report of the Domestic and Foreign Oil and Gas Industry 2018″ (hereinafter referred to as “the report”) predicts that in 2019, environmental protection policies will continue to drive the rapid growth of China’s natural gas demand, at the same time, the output of natural gas will increase steadily, the import volume will maintain a high growth rate, and the supply and demand of natural Tightly balanced, seasonal supply and demand contradictions will continue to ease with the steady improvement of peak-shaving capacity of gas storage.
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Sun Wenyu, an economist at the Institute of Natural Gas Market Research, China Petroleum Economic Research Institute, said at the briefing that in 2018, China’s natural gas supply security system made positive progress. Local governments and gas supply enterprises actively constructed gas storage and peak shaving facilities, accelerated the interconnection of pipeline networks, prepared domestic and foreign resources, strengthened demand-side management, and relieved gas supply tension in winter through comprehensive management.
“However, the development of China’s natural gas industry is still not balanced enough. In the future, we will actively increase domestic gas supply, continue to strengthen the capacity building of gas storage and peak shaving, speed up the improvement of natural gas pipeline network construction, and improve the natural gas supply security system in terms of resources, reserves and institutional mechanisms.” Sun Wenyu said.
According to the report, environmental factors will be the main driving force for the sustained and rapid growth of China’s natural gas demand in the short term. With the implementation of the “Three-year Action Plan for Winning the Blue Sky Defence War”, local governments will strengthen the control of loose coal combustion. At the same time, due to the comprehensive effects of macroeconomic development transformation, favorable policies for small and medium-sized enterprises, and stricter environmental protection policies, the major gas industries such as building materials, metallurgy and chemical industry will continue to promote industrial upgrading, and the demand for gas will maintain growth.
The report predicts that China’s natural gas consumption will reach 308 billion cubic meters in 2019, an increase of 11.4% over the same period last year, and a decrease of 5.2 percentage points over 2018. Among them, urban gas will continue to grow rapidly, increasing by 12.1% to 111 billion cubic meters, industrial gas demand by 14.2% to 104 billion cubic meters, and power generation gas and chemical gas by less than 10%.
In terms of production, the report predicts that major suppliers will actively increase investment in exploration and development, domestic natural gas production will grow steadily, and shale gas production will maintain a relatively rapid growth rate. It is estimated that China’s natural gas production (coal-based gas) will reach 170.8 billion cubic meters in 2019, an increase of 8.6% over the previous year, accounting for 54.4% of the supply structure.
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On the import side, the report said that in 2019, some newly signed liquefied natural gas (LNG) contracts began to be implemented, China-Russia Eastern Line was put into operation, and Kazakhstan’s imported pipeline gas volume increased, which will jointly promote the sustained and rapid growth of natural gas imports. It is estimated that the annual import volume will be 143 billion cubic meters, an increase of 14% over the same period last year, and the degree of external dependence will reach 46.4%. Among them, imported pipeline gas was 58 billion cubic meters, an increase of 11.5% over the same period last year; imported LNG was 62.5 million tons (about 85 billion cubic meters), an increase of 15.7% over the same period last year.
In addition, the intensive operation of LNG receiving stations will provide a strong guarantee for the rapid growth of LNG imports in China. According to the report, with CNOOC Tianjin LNG receiving station, CNOOC Fangchenggang LNG receiving station and CNOOC Tangshan LNG receiving station phase III, China’s LNG receiving capacity will reach 75.55 million tons per year in 2019.
In terms of import gas prices, taking into account the fluctuation of international oil prices and the ease of supply in the international LNG market, the report predicts that import pipeline gas and import LNG prices will fall slightly in 2019.
Bai Hua, an economist at the Institute of Natural Gas Market Research, China Petroleum Research Institute, said at a briefing that in 2019, supply and demand in the global natural gas market will continue to be loose, and output and demand will grow at the same time, with an expected growth rate of 3%. Among them, LNG demand will maintain a relatively fast growth rate, and Asia-Pacific LNG demand will account for nearly 80%. Spot prices are expected to fall as LNG trade activity continues to rise.
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