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Barclays: $70 More Likely Than $100

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While there have been plenty…

PetroChina Lifts Gas Supplies In April

Gas pipeline

PetroChina supplied 14 percent more natural gas to its customers last month, parent CNPC said, in response to growing demand. Over the first four months of the year, PetroChina increased gas production at key domestic fields by 2 percent on the year to 30.5 billion cubic meters, but imports grew much more substantially, by 29 percent.

This month, however, PetroChina began cutting natural gas deliveries to certain industrial clients signaling still tight supply of the fuel that caused rather severe shortages in northern China in December. Reuters quoted four unnamed sources as saying the move aimed to reduce the risk of new shortages this winter and also included raising gas prices for some large buyers, including gas distributors and liquefaction plant operators.

As part of its efforts to security supplies for the winter, PetroChina is also boosting gas in storage: CNPC said the company had added 1.49 billion cubic meters to its stockpiles in April, which is 33 percent more than a year ago. This winter, PetroChina expects to supply 10 percent more gas from storage than last year as demand continues to grow.

State energy companies in China have begun turning depleted gas fields into gas storage facilities to avoid a repeat of this winter’s supply crunch. The plans are to have all 25 underground gas storage sites full 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: LNG Remains In Tight Supply In This Key Market

In addition to building more LNG import capacity, China has also doubled down on its gas commitment to Iran, where CNPC is ready to take over French Total’s stake in the joint project for the Phase 11 development of the huge South Pars gas field.

Natural gas demand in China will grow at double-digit rate this year, although it would be lower than last year’s 15.3-percent growth rate, at least according to CNOOC’s trading and marketing vice president, Wu Hongkun. The slowdown will be the result of the government reining in its ambitious coal-to-gas power generation shift plan, which was the cause of last winter’s gas shortages.

By Irina Slav for Oilprice.com

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