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Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

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Can China Combat Its Natural Gas Crisis?

Last December, LNG imports into China hit a record high amid natural gas shortages due to the government moving too fast with its shift from coal to gas as well as gas transport infrastructure construction falling behind. But this year things will be different, according to the head of Sinopec’s trading division, Unipec.

Speaking at the LNG Forum in Singapore, Chen Bo said, as quoted by Reuters, “We didn’t have the experience before to deal with such a situation.” But this year, he added, “demand will increase but the government and companies will control.”

Last year, China became the world’s second-largest LNG importer, taking in some 38 million tons of the fuel, a 46-percent increase on 2016. Even so, some parts of the country suffered shortages because the gas could not reach them fast enough. As a result, China is now actively working on expanding its LNG storage capacity and pipeline network.

Earlier this month Sinopec said it had plans to boost its LNG import capacity to 26 million tons annually over the next six years from the current 9 million tons. China’s total of LNG import capacity is 17 million tons. State energy companies have also begun turning depleted gas fields into gas storage facilities to avoid a repeat of this winter’s supply crunch.

Plans are to have all 25 underground gas storage sites before winter, and to increase LNG imports: according to Wood Mac, China’s LNG imports are set for a 25-percent increase this year, to 48-49 million tons. Related: OPEC’s Biggest Problem

Fresh customs figures for March, meanwhile, revealed a 64.2-percent increase in LNG shipments to 3.25 million tons, Xinhua reported. Over the first quarter of the year, China imported 12.38 million tons of LNG, up 59.1 percent on Q1 2017.

Chances are that imports will continue to increase: the available storage capacity is only enough to cover 5 percent of the country’s gas consumption. That’s twice as low as the international average, which stands at 10-12 percent, but Beijing has launched a storage-building strategy that will see the current capacity doubled over the next five to eight years.

By Irina Slav for Oilprice.com

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Leave a comment
  • Dave Clarke on April 24 2018 said:
    Incredible, sweeping upgrades to LNG infrastructure worth many billions around the world,Yet our drooling idiot in Ottawa can barely put on matching socks. Liberal toxic stupidity.
  • JGS on April 24 2018 said:
    China is a command economy. The government can order "sweeping upgrades", never mind the disruption to ordinary people that they cause. You think it's so great, you go live there. I've been there. I'll stick with the liberal west, thank you.
  • Prsnep on April 25 2018 said:
    Dave, I don't see the point you are trying to make. Is Canada falling behind in LNG infrastructure? China is quickly shifting to natural gas from coal to combat global warming.
  • Dave Clarke on April 25 2018 said:
    As to the first, I am not only pointing out China. Malaysia, Japan, Taiwan, South Korea, Australia not to mention the U.S and a host more in the middle east which are building and approving energy infrastructure at breakneck speed. To the second, my point is there is no Canadian LNG infrastructure, nor new Natural gas, or Oil upgrading infrastructure in the category that would benefit new world wide demand. Nor will there be any as every level of Canadian Gov't will not speak up against the paid for activists in support of our own sovereignty.
    Our thumb sucking PM could only get his head further up his rectum if the hands of the NGO eco-Nazis, and the EU were not already there far up there playing our selfie sock puppet like a jesters fool for the eyes of the world.

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