China's dependence on foreign natural gas rose to

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China's external dependence on natural gas rose to 32.2%

A Research Report entitled "uncertainties facing China's natural gas development" (hereinafter referred to as the "report") recently released by the China Federation of petroleum and chemical industries shows that China's apparent consumption of natural gas in 2014 was 180billion cubic meters, an increase of 7.4% year-on-year, including 58billion cubic meters of imported natural gas, with an external dependence of 32.2%

according to the energy development strategic action plan (year) issued by the State Council office, by 2020, China's total primary energy consumption will be controlled at 4.8 billion tons of standard coal, and the proportion of natural gas consumption will be more than 10%, equivalent to 360billion cubic meters; The total target of domestic conventional natural gas, shale gas and coalbed methane is 245billion cubic meters. The external dependence of natural gas is thus controlled within 32%. However, Li Runsheng, vice president of the China Federation of petroleum and chemical industries, said in an interview that in view of many uncertain factors in the market, China faces severe challenges in achieving the natural gas development goals

the demand for natural gas continues to grow, and the degree of external dependence continues to increase.

"the development and utilization of natural gas is not only of great significance to China's energy security, but also of great significance to improve the energy structure and promote the development of clean energy." Li Runsheng said that the Chinese government attaches great importance to the development of natural gas and places the development of natural gas in the strategic position of national economic development. Over the past decade, the natural gas industry has developed rapidly, and the market demand for natural gas has increased year by year

the report shows that in, China's natural gas consumption increased from 24.5 billion cubic meters to 167.6 billion cubic meters, with an average annual growth rate of 16%, higher than the total energy consumption (7.9%) and GDP growth rate (10.2%) in the same period. The proportion of natural gas in total energy consumption rose from 2.2% installed on swing frames in 2000 to 5.9% in 2013

"in the past two years, although the natural gas market has been affected by factors such as the economic slowdown and the decline in coal prices, some changes have taken place in the internal and external conditions for the development of China's natural gas market. However, the trend of annual growth in natural gas consumption has not changed." Li Runsheng said that the average annual growth rate of China's natural gas consumption in the past two years was 13.3%

with the continuous growth of market demand, the imbalance between supply and demand is becoming more and more serious, which leads to the continuous improvement of China's external dependence on natural gas. The report shows that in 2013, China's natural gas consumption was 167.6 billion cubic meters, a year-on-year increase of 15.9%, and the imported natural gas was 52.9 billion cubic meters. The external dependence has soared from 5.7% in 2007 to 31.6%. In 2014, the apparent consumption of natural gas was 180billion cubic meters, with a year-on-year increase of 7.4%. The imported natural gas was 58billion cubic meters, and the external dependence increased to 32.2%. The peak valley difference in natural gas use caused by seasonal changes and regional differences poses a severe challenge to supply security. The peak valley difference in winter and summer in North China is 5:1, while that in Beijing is more than 10:1

according to the calculation of relevant experts, according to the strategic action plan for energy development (2020), China's total primary energy consumption will be controlled at about 4.8 billion tons of standard coal by 2020, and the proportion of natural gas consumption will reach more than 10%, which is equivalent to 360billion cubic meters. The action plan also proposes to strengthen the construction of energy supply capacity and continuously improve the ability to independently control the external dependence of energy based on domestic conditions. In 2020, China's conventional natural gas production target is 185 billion cubic meters, shale gas production will strive to exceed 30 billion cubic meters, and coalbed methane production capacity will strive to reach 30 billion cubic meters. That is, the total output target of China's self-produced conventional and unconventional natural gas in 2020 is 245billion cubic meters. Based on this calculation, imported natural gas only needs 115billion cubic meters. China's dependence on foreign natural gas can be controlled within 32%

"to achieve the above natural gas development goals, we face great challenges." Li Runsheng told that a recent report made by the China Federation of petroleum and chemical industries showed that there were many uncertainties in China's natural gas market

the increase of market uncertainties poses challenges in achieving the natural gas target.

the report believes that the uncertainties in China's natural gas market are first manifested in the lack of domestic natural gas production capacity

it is more difficult to increase reserves and production of conventional natural gas. At present, the production of old gas fields will decrease year by year, and the problem of declining reserve production ratio has emerged. By 2020, it is estimated that China's conventional natural gas will increase economically, but in the actual testing process, the recoverable reserves will be 1.8 trillion cubic meters, and the reserve production ratio will slowly decline to about 24. If the average annual growth rate of conventional natural gas is 6%, the average annual output will reach 174 billion cubic meters. Unless there is a rapid increase in tight gas production, it is expected to achieve the target of 185billion cubic meters of conventional natural gas production proposed in the "action plan"

although shale gas has good prospects, there is a large gap between the production and expectation. Shale gas is not only difficult in engineering technology, but also faces great challenges in economy under the scenario of medium and low oil prices. PetroChina plans to increase 110 shale gas wells every year. In 2020, the cumulative number of shale gas wells will reach 847, and the annual shale gas production will be 7.73 billion cubic meters based on the calculation of 25000 cubic meters per day for a single well; Sinopec [Weibo] plans to increase 100 wells every year. In 2020, the cumulative number of shale gas wells will reach 749, and the annual output of a single well is 10.94 billion cubic meters based on 40000 cubic meters/day. Considering the possible breakthrough of shale gas in Ordos (8.40, -0.27, -3.11%) basin and other aluminum alloy gate GB 8478 (2) 003 area, it is estimated that the national shale gas production will be about 20billion cubic meters in 2020, which is quite far from the target of 30billion cubic meters proposed in the action plan

coalbed methane is still not out of the dilemma, and the production is also lower than expected. For a long time, CBM development has been affected by serious insufficient investment in exploration and development, overlapping mining rights and other factors. At the same time, weak infrastructure such as management has also increased the cost and risk of CBM development projects. According to the calculation of 2000 new wells per year in the future, the output in 2020 will be 10.8 billion cubic meters and the utilization will be 8.3 billion cubic meters. The underground extraction volume increases at a rate of about 1billion cubic meters per year, reaching about 16.2 billion cubic meters in 2020, with a utilization of 5.5 billion cubic meters. The total output of ground and underground is 27billion cubic meters, and the utilization is 13.8 billion cubic meters, which is a certain gap from the output target of 30billion cubic meters in the action plan. However, China's coal based natural gas is inherently deficient, and it is difficult to play a major role in the natural gas market

According to the report, the actual supply capacity of natural gas in China will reach 376billion cubic meters in 2020, including 236billion cubic meters of domestic natural gas and 140billion cubic meters of imported natural gas. There is a gap of about 24billion cubic meters between domestic natural gas and the goal of the action plan. According to the relevant experts of the economic reference Energy Research Institute of Xinhua news agency, China's dependence on foreign natural gas will exceed 37.2% in 2020

however, the report also believes that there are many uncertainties in China's natural gas consumption demand. For example, the slowdown of domestic GDP growth affects the growth of natural gas consumption. The future growth potential of natural gas market mainly lies in the development of power generation, industrial fuel coal to gas, and urban and transportation gas. At present, although the annual consumption of natural gas in the chemical industry has exceeded 30billion cubic meters, it is expected that the chemical industry gas consumption may not exceed 50billion cubic meters in 2020 because the chemical industry gas will be more affected by price and policy factors. At current prices, it is not competitive to replace coal with natural gas for power generation. It is estimated that 51.5 billion cubic meters of gas will be used for power generation in 2020. In addition, the opening of the downward channel of international oil prices and the promotion of domestic power system and transmission and distribution price reform have also increased the uncertainties of the natural gas market. Based on this, the report predicts that China's natural gas consumption demand in 2020 may be only 310billion cubic meters, which is 50billion cubic meters away from the 360billion cubic meters target of the action plan

speed up the reform of the price mechanism and improve the domestic production guarantee capacity

analyzing the above uncertain factors, Li Runsheng believes that an important reason is that the natural gas price market system in China's vertically clamped sample country has not been established. It can be summed up in three aspects: first, the price of natural gas can not transmit market information in time, which is difficult to fully reflect the scarcity of clean energy. Second, the inverted price of imported gas has put great pressure on natural gas supply enterprises. At the same time, price adjustment has increased cost pressure on power and industrial users, restricting the process of changing coal to gas. Third, the gas price relationship between industrial users and urban residents is not smooth, forming cross subsidies

Li Runsheng said that China's natural gas market system is in a period of development and growth. In order to speed up the adjustment of energy structure and improve the proportion of China's natural gas consumption, we must first innovate institutional mechanisms, strengthen the exploration and development of natural gas, and do everything possible to improve the domestic natural gas production guarantee ability. For example, strengthen the management of mining rights and strictly enforce the withdrawal mechanism of exploration rights; Establish a mining rights trading market to promote the circulation of mining rights; Guide the diversification of investment subjects, encourage private capital to develop unconventional oil and gas and difficult to use reserves through joint ventures and cooperation, and support joint ventures and cooperation between local governments and enterprises; Set up risk exploration fund, expand exploration in new areas and seek strategic replacement; Increase scientific and technological investment in the development of unconventional resources such as tight gas, and encourage the rapid development of tight gas through differentiated fiscal and tax policies; Adhere to policy incentives and continue to promote the accelerated development of shale gas and coalbed methane

"it is more important to accelerate the reform of natural gas price mechanism and establish and improve the natural gas price market system." Li Runsheng stressed that we should speed up the integration of stock gas and incremental gas; Promote the reform of residential gas prices in place; Establish the peak and valley price mechanism by season and period, and solve the peak shaving problem from the price mechanism; Straighten out the relationship between imported gas and domestic gas, industrial and residential gas. The main target of natural gas substitution in China is coal. While adhering to the price formation mechanism linked to oil, we should explore to increase the price parameters of coal

it is understood that at the end of 2011, the national development and Reform Commission implemented natural gas price reform in Guangdong and Guangxi provinces. Its most remarkable feature is to change the current pricing method based on cost plus into the pricing method based on net return value. This adjustment initially established a price mechanism that reflects the relationship between market supply and demand and the degree of resource scarcity, laying a foundation for straightening out the price comparison relationship between natural gas and alternative energy, and finally forming a mechanism for the market to determine the price of natural gas

at the same time, while promoting the reform of natural gas price mechanism, we should also strengthen the regulation and supervision of the natural gas industry. Li Runsheng, for example, should strengthen the policy regulation of energy conservation and emission reduction and coal to gas; Study and formulate unified supervision standards, regulations and supervision systems; Strengthen the planning and supervision of natural gas pipelines, enhance the public service function of natural gas pipelines, and speed up the opening of natural gas pipelines to third parties; Give full play to the intermediary role of industry associations in the cultivation of natural gas market, and establish a transparent information statistics and release system for natural gas and urban gas, so as to promote the realization of the natural gas development goals set out in the action plan

note: the reprinted content is indicated with the source. The reprint is for the purpose of transmitting more information, and does not mean to agree with its views or confirm the authenticity of its content

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