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Chinese demand for natural gas is forecast to rise by 10 percent this year, a slower growth rate than in previous years, as slowing economic growth impacts demand, state-run Sinopec Gas Company said on Tuesday.
“Due to the macroeconomic situation and the government’s easing push to the coal-to-gas program, China’s gas consumption growth is slowing,” Reuters quoted a Sinopec official as saying, reading prepared remarks of deputy chief economist Wu Gangqiang.
Between January and September 2019, China’s natural gas imports increased by 10 percent compared to the same period of 2018, according to government data cited by Reuters.
Total gas consumption for full 2019 is seen rising by just 10 percent, down from the 17-percent growth last year, according to Sinopec.
The company’s estimates mirror the official estimates of the government showing that the slowing economic growth in China is taking a toll on gas demand growth. Chinese government estimates show that Chinese natural gas consumption is set to grow by 10 percent this year, reaching 310 billion cubic meters (bcm). This year’s growth would be lower compared to last year’s 17.5-percent consumption increase, yet Chinese demand is expected to continue to grow until 2050, a government research report said last month.
Despite the current economic slowdown, no one expects Chinese demand for natural gas to start declining any time soon. Analysts predict continued growth, driven by the coal-to-gas switch, although the growth could be lower than in the recent bumper years.
“China will be the main driver for gas demand growth, though slower than in the recent past as economic growth slows, but still accounting for about 40% of total gas demand increase to 2024,” the International Energy Agency (IEA) said in its Gas 2019 report earlier this year.
Yet, some analysts are not convinced that China will be able to meet its targets to boost significantly its domestic natural gas production, especially shale gas, which could lead to even more import dependence in the future.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.