China seeks to increase natural gas consumption: EIA report

19 August 2014 (Last Updated August 19th, 2014 18:30)

The Chinese Government is making further efforts to rely more on natural gas in order to meet its rising energy consumption, and cut down its dependence on coal and oil, with an aim to reduce air pollution and carbon dioxide emissions.

China

The Chinese Government is making further efforts to rely more on natural gas in order to meet its rising energy consumption, and cut down its dependence on coal and oil, with an aim to reduce air pollution and carbon dioxide emissions.

According to a report from the US Energy Information Administration (EIA), China expects natural gas to account for 8% of total energy consumption by the end of 2015 and 10% by 2020.

In 2012, the share of natural gas was only 4.9%.

The increase in domestic natural gas production and infrastructure investments, along with growing imports, could enable natural gas to play a significantly larger role in the future, the report said.

The government is also aiming to increase production, potentially from large onshore fields in the western and north central regions of the country, as well as from the offshore deepwater regions in the South China Sea.

China aims to reach around 5.5Tcf of natural gas per year by the end of 2015.

"The increase in domestic natural gas production could enable natural gas to play a significantly larger role in the future."

China, which currently operates ten major regasification terminals with 1.7Tcf/y of capacity, is significantly increasing LNG import capacity in the urban coastal areas.

Additionally, investment is being made in natural gas pipeline infrastructure in order to link production areas in the western and northern regions to demand centres along the coast.

The investment in infrastructure will also enable China to accommodate greater imports from neighboring countries.

Recently, a $400bn natural gas agreement was finalised to acquire and transport up to 1.3Tcf of natural gas per year from eastern Russia through a proposed pipeline, starting from 2018.

China has the largest reserves of technically recoverable shale gas in the world; however, investors face geological, technical and water resource challenges, in addition to regulatory hurdles.


Image: Map showing China's selected natural gas infrastructure. Photo: courtesy of US Energy Information Administration, IHS EDIN.

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