• 11 hours Oil Prices Rise After API Reports Major Crude Draw
  • 12 hours Citgo President And 5 VPs Arrested On Embezzlement Charges
  • 12 hours Gazprom Speaks Out Against OPEC Production Cut Extension
  • 13 hours Statoil Looks To Lighter Oil To Boost Profitability
  • 14 hours Oil Billionaire Becomes Wind Energy’s Top Influencer
  • 15 hours Transneft Warns Urals Oil Quality Reaching Critical Levels
  • 16 hours Whitefish Energy Suspends Work In Puerto Rico
  • 17 hours U.S. Authorities Arrest Two On Major Energy Corruption Scheme
  • 1 day Thanksgiving Gas Prices At 3-Year High
  • 1 day Iraq’s Giant Majnoon Oilfield Attracts Attention Of Supermajors
  • 1 day South Iraq Oil Exports Close To Record High To Offset Kirkuk Drop
  • 2 days Iraqi Forces Find Mass Graves In Oil Wells Near Kirkuk
  • 2 days Chevron Joint Venture Signs $1.7B Oil, Gas Deal In Nigeria
  • 2 days Iraq Steps In To Offset Falling Venezuela Oil Production
  • 2 days ConocoPhillips Sets Price Ceiling For New Projects
  • 4 days Shell Oil Trading Head Steps Down After 29 Years
  • 4 days Higher Oil Prices Reduce North American Oil Bankruptcies
  • 4 days Statoil To Boost Exploration Drilling Offshore Norway In 2018
  • 5 days $1.6 Billion Canadian-US Hydropower Project Approved
  • 5 days Venezuela Officially In Default
  • 5 days Iran Prepares To Export LNG To Boost Trade Relations
  • 5 days Keystone Pipeline Leaks 5,000 Barrels Into Farmland
  • 5 days Saudi Oil Minister: Markets Will Not Rebalance By March
  • 5 days Obscure Dutch Firm Wins Venezuelan Oil Block As Debt Tensions Mount
  • 5 days Rosneft Announces Completion Of World’s Longest Well
  • 6 days Ecuador Won’t Ask Exemption From OPEC Oil Production Cuts
  • 6 days Norway’s $1 Trillion Wealth Fund Proposes To Ditch Oil Stocks
  • 6 days Ecuador Seeks To Clear Schlumberger Debt By End-November
  • 6 days Santos Admits It Rejected $7.2B Takeover Bid
  • 6 days U.S. Senate Panel Votes To Open Alaskan Refuge To Drilling
  • 6 days Africa’s Richest Woman Fired From Sonangol
  • 6 days Oil And Gas M&A Deal Appetite Highest Since 2013
  • 7 days Russian Hackers Target British Energy Industry
  • 7 days Venezuela Signs $3.15B Debt Restructuring Deal With Russia
  • 7 days DOJ: Protestors Interfering With Pipeline Construction Will Be Prosecuted
  • 7 days Lower Oil Prices Benefit European Refiners
  • 7 days World’s Biggest Private Equity Firm Raises $1 Billion To Invest In Oil
  • 7 days Oil Prices Tank After API Reports Strong Build In Crude Inventories
  • 8 days Iraq Oil Revenue Not Enough For Sustainable Development
  • 8 days Sudan In Talks With Foreign Oil Firms To Boost Crude Production

China’s Transfer From Coal To Gas Is Well Under Way

China’s Transfer From Coal To Gas Is Well Under Way

On Tuesday, Sinopec, one of China’s top energy companies, received the first LNG cargo at its new import terminal in Beihai. The company is now moving full speed ahead with plans for three more terminals across the country in a major shift from coal to gas.

The LNG will be re-gasified at the new terminal and then supplied to household consumers in the regions of Guangdong and Guangxi, in southern China. The facility has an annual processing capacity of three million tons of LNG. The first cargo, from Australia-Pacific LNG, was 160,000 cubic meters.

Related: $91 Billion In Capex Cuts, A Serious Hangover For Oil

Beihai is the second LNG import terminal of a total of five terminals Sinopec plans to build across the country. The first started operations last year, at the port on Qingdao, and the other three will be built at Tianjin, Jiangsu and Zhejiang.

China is currently in the process of shifting its economic model from a focus on manufacturing and heavy industries to services and local consumption as the drivers of growth. This shift involves a switch from coal, which currently accounts for more than 60 percent of the country’s energy mix, to more environmentally friendly types of fuel, including natural gas as an obvious alternative.

Related: Low Oil Price Thwarts Wider LNG Adoption in Shipping—For Now

Beijing is also expending significant effort towards stimulating the consumption of gas. Last year, the government reduced gas prices twice in order to encourage users to make the switch. At the moment, according to Chinese consumption data, there is healthy demand for gas, supported by continuing government measures, such as incentives for gas-fueled power plants and price cuts.

Local energy leaders seem to share the opinion that LNG will be a growing part of China’s energy mix. Just recently, the vice president of CNOOC said LNG was “irreplaceable” in view of the government’s determination to cut carbon emissions. Chinese forecasts suggest natural gas will represent 10 percent of the energy mix in four years, which translates into between 300 and 360 billion cubic meters a year, according to Platts. It’s worth noting, however, that not all of this will be imported LNG: China gets a lot of its gas from Russia and Central Asia via pipelines.

Related: What A Recovery For Oilfield Services Might Look Like

More optimism can be found in a report from the Australian Department of Industry, Innovation, and Science. The report, by chief economist mark Cully, suggests that LNG demand in the Asian nation may rise by 38 percent by 2030. The keyword here, unfortunately, is may. Whether or not this demand growth will be achieved depends on the government’s long-term dedication to carbon emission reduction as well as on the progress of the economic shift, among other, unforeseeable factors.

Right now, there is worry among some analysts that the shift away from manufacturing is affecting demand for gas in a substantial way. The effect is only natural—a consequence of moving from a focus on energy-intensive industries to industries that don’t consume as much—and should be temporary. How temporary exactly is the question that counts, but its answer lies in the future.

By Irina Slav of Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News