According to ASIACHEM data, in 2016, China produced 137.1bnm3 of natural gas, a growth of 1.5% over 2015. The production included about 8.5bnm3 of shale gas, a dramatic jump of 90% and 7.4bnm3 of CBM, an increase of 68% from the previous year level. Chinese gas imports in 2016 totalized up to 72.1bnm3, grew by 17.4% and showing a foreign dependency of 34%. The year’s NG consumption of the whole nation was recorded 20.58bnm3, a growth of 6.6%, while the part of gas accounted for 6.2% of the totalized primary energy consumption.
Over the past decade, China natural gas production and consumption of the average growth rate of 7.9% and 12.6%. Since 2014, both production and consumption growth rate have slowed, but the growth rate of consumption continues to outpace production growth. With the changes in the energy consumption structure of the residents in the process of urbanization in China, and the increasing demand for gas in the context of increasingly stringent environmental protection, the downstream demand for natural gas still has a further grow space. The development of domestic unconventional natural gas, import pipeline gas, import LNG is the three main ways to solve China's natural gas supply and demand gap.
Currently, three import pipelines have been formed gradually on mainland China, namely Middle Asia line, Sino-Myanmar line and Russian NG line, entering Chinese territory from Northwest, Southwest and North/Northeast respectively. Has been put into use in the Middle Asia line ABC has total gas transmission capacity of 55bnm3/a, the Middle Asia line D is under construction, and expected to put into operation in 2020, with gas transmission capacity of 30bnm3/a. In the long term, Russia will be one of the major sources of energy in northern China.
In 2016, China imported 2797Mt (37.3bnm3) of pipeline natural gas, accounting for 52% of the total gas imports. Biggest supplier country was Turkmenistan, followed by Uzbekistan.
By the end of 2016, in total 14 LNG reception terminals have been in use nationwide in China, with 51.3Mt/a (68.5bnm3/a) receiving capacity. SINOPEC Beihai, Guangxi LNG terminal was started operation in 2016, adding 3Mt/a more capacity to the nation’s total. LNG receiving capacity of CNPC Rudong, Jiangsu LNG terminal and CNPC Dalian Liaoning LNG terminal were expanded to 6.5Mt/a and 6Mt/a, respectively.
In 2016, China imported 26.15Mt (26.7bnm3) of LNG, an increase of 30.7% compared with last year. Fifteen countries supplied LNG to China in 2016, the top three, Australia, Qatar and Indonesia, accounting for 75% of the total imports.
In 2016, China shale gas production was about 8.5bnm3, an increase of 90% compared to 2015. Issue of “Shale Gas Developing Program (2016-2020)” which published by NEA in Sep. 2016 proposed that, yearly shale gas output approaching 30bnm3 by 2020 and to obtain yearly shale gas output of 80-100bnm3 by 2030.
Taking into account that in the past few years, China shale gas exploration and development achieved major breakthrough, which laid the foundation for the large-scale development during 13FYP; shale gas supported by policy as its industry position of major clean energy; market-oriented reform of natural gas will gradually activate natural gas industry chain, ASIACHEM believes that the national target of 30bnm3 shale gas output in 2020 will be successfully achieved.
At the end of 2016, the "Energy Development 13FYP" issued by NEA proposed that, to promote coal to gas, oil to gas in the field of civil use, industrial and transportation, to increase the proportion of natural gas consumption, and strive to 10% by 2020. In Jan. 2017, the NDRC "Natural Gas 13FYP" proposed that, proportion of natural gas consumption to reach 8.3%-10% by 2020, and cleared that the natural gas vehicle support policy should be studied and formulated. In Feb. 2017, the NEA "Energy Work Guidance 2017" put forward, natural gas consumption ratio should reach about 6.8%. According to the planning, China natural gas consumption in 2020 is expected to reach 340bnm3, the compound growth rate up to 14.5% during 2015-2020, much higher than 5% during 2012-2015, the future development of China's natural gas market is very broad.
