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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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China's Gas Production Hits Three-Year High

China pumped natural gas at the highest rate since 2014 in December 2017 in an attempt to make up for shortages of the fuel in the northern parts of the country amid harsh winter weather, China’s national statistics authority said today.

The daily average reached 13.6 billion cubic meters, versus 12.6 billion cubic meters in November. The full-2017 total hence jumped by 8.5 percent on an annual basis to 147.4 billion cubic meters. Sinopec alone reported a 19-percent annual increase in its natural gas production last year.

As part of its fight against pollution, Beijing ordered a switch from central heating, supplied by coal-fired plants, to gas heating. The switch affected millions of households and businesses in northern China, but the government’s ambitious pollution-tackling plans failed to factor in challenges such as demand and lack of adequate transport infrastructure for gas.

As a result, state companies had to urgently raise domestic production, and imports soared to an all-time high of 7.89 million tons, including pipeline flows and LNG shipments. The December figure beat the previous record, booked in November, by 20 percent. This record-high import rate made for a fitting end to a year that saw natural gas imports into the country soar by 27 percent annually to 68.57 million tons.

Earlier this week, another state giant, CNPC, said it expected this year’s demand for natural gas to continue growing, with the annual increase over 2017 seen at 10 percent, and imports seen rising by 13.4 percent. Though substantial, these growth numbers are a decline on 2017, when demand expanded by 17 percent and imports swelled by 27 percent.

CNPC expects Beijing’s clean air drive to lose some of its steam this year as demand from industrial consumers falls due to slower economic growth. But even so, there will be more seasonal gas supply disruptions as infrastructure development lags behind demand growth.

By Irina Slav for Oilprice.com

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