Overview of China’s Natural Gas Industry
Growing energy demand and heightened interest for clean energy sources are driving the growth in China’s natural gas industry. Natural gas is regarded as a clean source of energy as it is efficient to produce, safe to use and more environmental friendly. China is currently the world’s third largest natural gas consumer after the United States and Russia. Natural gas consumption in China rose from 7.2 bcf per day in 2008 to 12.4 bcf per day in 2012, representing a CAGR of 14.6%. China’s portion of global gas consumption also rose significantly from 2.7% in 2008 to 4.3% in 2012.
【According to SIA Energy, China’s total gas consumption was up 15% to 134.5 billion cubic meters for the first half of 2018 compared to the first half of 2017. 】According to SIA Energy, China’s gas consumption per capita is expected to grow to 22.2 cubic feet per day by 2020. Although this represents a CAGR of 9.2% from 2012 to 2020, China’s gas consumption per capita by 2020 will still be significantly lower than the world average of 42.2 cubic feet per day by 2020. These differences indicate significant growth potential for natural gas consumption in China.
China Gas Supply (2011-2020)
SIA Energy predicts that China’s natural gas supply and consumption will reach 32.0 bcf per day by 2020, representing a CAGR of 9.4% from 2014. This forecast is made according to a SIA Energy’s assumed development schedule of new gas supply sources, including domestic conventional and unconventional gas sources, pipeline gas imports, LNG imports, and more readily available infrastructure. SIA Energy predicts that China’s natural gas market will continue to be supply- and infrastructure-constrained for the next six years. According to SIA Energy, China’s natural gas supply growth from 2014 to 2020 will be mainly driven by unconventional gas production, which is expected to grow at a CAGR of 33.4%, as well as pipeline imports, which are expected to grow at a CAGR of 15.1%. By contrast, domestic conventional gas production is expected to grow at a CAGR of 3.1%. The chart above illustrates the contributors to gas supply and consumption in the PRC since 2011 and projections for the growth of those contributors through 2020.