China gas demand seen up 8% on economic recovery, easing fuel cost – CNOOC research
China’s natural gas demand this year is expected to grow by 8% from 2022, an analyst from state-owned oil major CNOOC’s research division said, a pace higher than analysts’ forecasts on the back of cooling gas prices and China’s economic recovery.
Xie Xuguang, from CNOOC Gas and Power Group’s research centre, told a conference on Thursday that China’s total gas demand may reach396.4 billion cubic metres (bcm) this year.
Imports of liquefied natural gas (LNG) are expected to reach 70.79 million metric tons this year, up 10.9% from last year, while those of pipeline gas is seen reaching 69.5 bcm, 10.7% above the 2022 level, Xie said.
The CNOOC forecast for demand growth is higher than that of three other analysts and comes after a rare decline in 2022, when Chinese gas demand slipped 1% amid rigid COVID-19 controls and saw China cede its top LNG importer ranking to Japan.
The growth is driven by China’s economic recovery and cooling global LNG prices, Xie pointed out.
“We’re expecting industrial gas demand to recover in the second half. And the normalising global gas prices are also going to stimulate demand,” Xie said.
Gas demand growth this year was seen at between 5.7% and 7.4%, according to estimates this week by ICIS, Energy Aspects and SIA Energy.
China’s total gas demand was forecast to peak in 2040 at 700 bcm, Xie added, echoing a previous forecast by state major Sinopec.
Part of that growth was met bydomestic production, which the CNOOC research team predicted rising 4.6% over 2023 to227.8 bcm.
Imports of both piped gas and liquefied natural gas were both expected to increase to meet rising domestic demand.
The country’s LNG receiving capacity, seen at 139.3 million tons annually by the end of 2023, is expected to expand to 181.8 million tons by 2025, Xie said.
To cope with “extreme situations”, CNOOC proposed the country build at least 15 bcm of emergency LNG reserves by 2025 and a 25 bcm stockpile for 2030.
At 15 bcm, that would represent roughly 12% of China’s total imports of the superchilled fuel by 2025, or 3.4% of the national gas demand.
Xie noted that most of 11% growth in pipedgas imports would come from Russia’s East Siberian fieldsvia the Power of Siberia pipeline.
Imports of Russian piped gas hadjumped 54% over the course of 2022, as Russia continues to make deliveries through the Power of Siberia which is expected to reach full capacity of 38 bcm annually by 2027.
CNOOC noted that China’s dependence on foreign imports was likely to increase in the coming years, with imports of LNG and piped gas expected to account for 46% of domestic demand in 2025 and 49% of domestic demand by 2035.
Source: Reuters (Reporting by Andrew Hayley; Writing by Chen Aizhu; Editing by Christian Schmollinger and Michael Perry)