China Steps Up Coal To Gas Switching

China’s demand for natural gas and liquefied natural gas (LNG) imports will get another shot in the arm this year as one of the most polluted heavily industrialized provinces plans to have two million households switch their heating source from coal to gas or electricity.  

The province of Henan in central China aims to have 2 million households make the switch away from coal in 2019, according to provincial government-backed Henan Daily, cited by Reuters.   

This year’s planned switch in the province is nearly double the number of households that made the conversion from coal to gas and electricity in 2018—1.124 million homes, according to Reuters.

Since 2016, as part of China’s efforts to cut coal use in household heating in a bid to reduce stifling pollution levels, almost 13 million households in northern China have replaced coal-fired heating with gas or electricity.

China’s natural gas demand is set to continuously grow in the foreseeable future. The BP Energy Outlook 2019 pegs China’s natural gas demand soaring by 166 percent between 2017 and 2040, to double its market share to 14 percent by that year from 7 percent in 2017. Although Chinese natural gas production is forecast to jump by 146 percent through 2040, it won’t be enough to cover booming demand, and China will see its natural gas import dependence growing from 38 percent in 2017 to 43 percent in 2040, BP says.

As early as in 2022, China will become the world’s top LNG importer outpacing the current leader, Japan, energy consultancy Wood Mackenzie said in a new report last month.

Thanks to the coal-to-gas switch, China became the world’s second-biggest LNG importer in 2017, surpassing South Korea and second only to Japan. Demand for natural gas in China will continue to grow in the coming years as Beijing favors increased use of cleaner-burning natural gas to clamp down on pollution.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:

• Big Oil Profits Lag Despite Rising Production
  
• Hedge Funds Turn Their Back On Oil
  
• The U.S. Might Sanction China’s Largest Oil Company