• 3 minutes Don't sneeze. Coronavirus is a threat to oil markets and global economies
  • 5 minutes Boris Johnson taken decision about 5G Huawei ban by delay (fait accompli method)
  • 9 minutes This Battery Uses Up CO2 to Create Energy
  • 12 minutes Shale Oil Fiasco
  • 3 hours Historian Slams Greta. I Don't See Her in Beijing or Delhi.
  • 3 hours We're freezing! Isn't it great? The carbon tax must be working!
  • 18 hours Indonesia Stands Up to China. Will Japan Help?
  • 8 hours US (provocations and tech containment) and Chinese ( restraint and long game) strategies in hegemony conflict
  • 6 hours Beijing Must Face Reality That Taiwan is Independent
  • 19 hours Tesla Will ‘Disappear’ Or ‘Lose 80%’ Of Its Value
  • 23 hours Environmentalists demand oil and gas companies *IN THE USA AND CANADA* reduce emissions to address climate change
  • 10 hours Might be Time for NG Producers to Find New Career
  • 2 days Phase One trade deal, for China it is all about technology war
  • 6 hours Trump has changed into a World Leader
  • 1 day Anti-Macron Protesters Cut Power Lines, Oil Refineries Already Joined Transport Workers as France Anti-Macron Strikes Hit France Hard
  • 2 days Angela Merkel take notice. Russia cut off Belarus oil supply because they would not do as Russia demanded
Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

More Info

Premium Content

China’s Natural Gas Imports Soar Despite Domestic Output Growth

PetroChina—the country’s largest oil and gas producer—is betting big on boosting natural gas production in line with the Chinese policy to increase its gas production and industrial and residential gas use.

Yet, planned production increases at the biggest upstream company will not even come close to reducing China’s dependence on oil and natural gas imports—they are set to further rise as the country’s energy demand grows, while domestic oil and gas production capacities struggle in vain to keep up with growth.

PetroChina will also look to raise its crude oil production as the world’s largest oil importing country tries to reverse a decline in its domestic crude oil production while its oil demand continues to grow.

To this end, PetroChina is planning to raise natural gas production at a faster rate than oil production.

“Domestic oil and gas resources are not good enough for significant production increases,” PetroChina’s vice chairman Zhang Jianhua told S&P Global Platts on the sidelines of the firm’s first-half earnings briefing last week.

Like the other Chinese state oil majors, PetroChina has also benefited from the higher crude oil prices and strong refining margins this year, reporting doubled net profit for the first half of 2018 and the best quarterly performance in the second quarter since Q2 2015.

PetroChina’s domestic crude oil production dropped by 1.3 percent in the first half of 2018, but domestic natural gas production rose by 2.5 percent, the company said in its H1 2018 earnings filing.

Over the next five years, PetroChina targets to raise its natural gas production by around 4-5 percent, while it sees oil production up 1 percent, the company’s managers said. Related: Saudis Boosted Oil Production To 10.424 Million Bpd In August

China’s overall crude oil production has been falling over the past two years as output at ageing fields declines. Gas production, while rising, is not enough to meet soaring demand amid the government efforts to cut pollution by having industries and residents switch to natural gas from coal.

China’s crude oil production dropped 2.6 percent on the year in July, and fell by 2.1 percent annually between January and July, according to data by the National Bureau of Statistics of China.

Although natural gas production increased, China will import growing volumes of gas to support its cleaner-fuel, cleaner-air policies.

According to the Gas 2018 report by the International Energy Agency (IEA), as domestic production can’t keep pace, China will become the world’s largest natural gas importer by 2019. Due to the country’s policy to reduce air pollution, China is expected to account for 37 percent of the global increase in natural gas consumption between 2017 and 2023, more than any other country, the IEA analysis shows. Related: Survey: OPEC’s August Production Rises

Last year, global natural gas demand rose by 3 percent, which was the highest increase since 2010. In China, demand jumped by 15 percent, accounting for nearly a third of the global increase. China’s liquefied natural gas (LNG) imports surged, resulting in China surpassing South Korea and becoming the world’s second-largest LNG importer behind Japan.

By 2023, China’s natural gas demand is expected to rise by an average 8 percent per year, accounting for over a third of global demand increase, the IEA said in its report. The share of imports in China’s natural gas supply is seen rising from 39 percent to 45 percent by 2023, the Paris-based agency forecasts.

By boosting natural gas production, PetroChina aims to seize market opportunities while following China’s cleaner-fuel policies. Yet, China’s gas demand will vastly outpace domestic production growth, making China an even more important player on the global natural gas and LNG markets than it is now.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage




Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play