Gas Processing & LNG is Produced by Gulf Publishing Holdings LLC



Slow coal conversion may lead to slashing of China's gas demand by half

BEIJING/SINGAPORE (Reuters) - China's natural gas demand is expected to expand at half the rate this winter compared to a year earlier, as Beijing slows its gasification push due to a weaker economy and competition from cheaper coal, state oil officials said on Friday.

Gas demand this winter is forecast at 145 billion to 150 billion cubic metres (bcm), 5-8% higher than a year before, said a gas marketing executive with state energy group Sinopec Corp .

Meng Yadong, director of the marketing department of Sinopec Gas Co, told an industry seminar in Beijing the growth is down from the 14.6% expansion in the previous heating season.

To battle air pollution and cut carbon emissions, Beijing has embarked on an aggressive gasification campaign since 2017 to replace coal with gas for the winter heating programme that spans its vast northern provinces from mid-November through mid-March the following year.

"There has been a tweak to the coal-to-gas policy this year that advocates more flexibility in using coal or gas ... that has had a fairly large impact on gas demand considering the price factor," Meng told the seminar.

China's coal-to-gas conversion will add 8 to 9 bcm of natural gas demand this winter, as the country continues gasification to fight pollution, Li Wei, a marketing director at PetroChina's Natural Gas Marketing Co, told the seminar.

For all of this year, the coal-to-gas switch is expected to add 17 bcm in gas consumption, comprising 12 bcm from industrial users and 5 bcm from the residential sector, Li said.

PetroChina, China's top natural gas producer and supplier, expects gas demand from its customers to reach 94.5 bcm this winter, 7% more than last winter, a pace also slowing compared to 8.8% a year earlier.

The scale-back was reflected in trade data released on Friday. China's imports of natural gas - including pipeline supplies and liquefied natural gas in tankers - fell for the first time in nearly three years, though part of that pullback was caused by an outage at a receiving terminal.

With the world's second-largest economy growing at its slowest in nearly 30 years, government agencies have stressed in recent months that coal conversions are for both electricity and natural gas depending on availability and economics.

Beijing is also strongly promoting ultra-low emission, or so-called "clean coal", technology that has been applied to nearly 80% of the country's thermal power generators.

At Friday's seminar organised by Chongqing Oil and Gas Exchange, an expert from a Ministry of Ecology and Environment think tank said there was uncertainty over whether subsidies would be extended beyond 2020, which could further cool the gasification push.

The central government paid 35 billion yuan ($5 billion) in subsidies between 2017 and 2019, said Feng Xiangzhao, deputy director at the Policy Research Centre for Environment and Ecology.

($1 = 6.9823 Chinese yuan renminbi) (Reporting by Muyu Xu in Beijing and Chen Aizhu in Singapore; Editing by Muralikumar Anantharaman, Tom Hogue and Dale Hudson)


Copyright © 2019. All market data is provided by Barchart Solutions. Futures: at least a 10 minute delay. Information is provided 'as is' and solely for informational purposes, not for trading purposes or advice. To see all exchange delays and terms of use, please see disclaimer.

                                  CMEGroup                                     Icelogo

FEATURED COLUMNS

Editorial Comment
-Adrienne Blume
The continued expansion of natural gas trade is led primarily by growth in the LNG sector, which has tripled over the past 3 yr.
Industry Focus: The future of gas-to-power projects in Africa
-Shem Oirere
Natural gas is expected to play a central role in supporting Africa’s drive to achieve electricity connection for nearly 600 MM people without access to the grid, to reduce widespread reliance on coal for power generation, and to fast-track the continent’s slowed industrial expansion.
Regional Focus: Gazprom faces challenges for combined LNG/processing plant in Baltics
-Eugene Gerden
Russia’s largest natural gas producer, Gazprom, aims to build a giant project on the Russian Baltic seaport of Ust-Luga. The plans include the construction of a combined LNG and gas processing plant.


GasPro 2.0: A Webcast Symposium

Register Now

Following on the heels of the highly successful GasPro 2.0 Webcast Symposium in October 2018, the second GasPro Webcast Symposium 2.0 will take place on October 24, 2019.

The 2019 web event will gather experts in the fields of LNG, gas processing, and gas transport/distribution to share their operations expertise, engineering and design solutions, and technology advances and trends with our audience.

Attendees will learn about technology and operational solutions and deployments in a number of areas: plant design and expansion, construction, NGL production, optimization, sulfur removal, marine operations and separation technology.

October 24, 2019 08:30 AM CDT

Register Now

 

Please read our Term and Conditions, Cookies Policy, and Privacy Policy before using the site. All material subject to strictly enforced copyright laws.
© 2019 Gulf Publishing Holdings LLC.