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China’s 2015 natural gas output growth slowest in at least 10 years

China’s 2015 natural gas production rose by 2.9 percent from the previous year – the slowest growth in at least 10 years – official data showed, amid ample supply and weak domestic demand for the cleaner-burning fuel.

Production reached 127.1 billion cubic metres (bcm) in 2015, the National Bureau of Statistics said. In 2014, production was roughly 123.5 bcm, up about 7 percent, Reuters calculations derived from the official data on Tuesday shows.

The statistics bureau typically revises its data on a monthly basis and the percentage change for 2015 output indicates that the previously provided 2014 figure will be revised.

In 2013, natural gas production rose by 11.5 percent from the previous year to 115.4 bcm, the NBS said. The 2015 output growth was the slowest since Reuters began collecting the data in 2005.

Chinese gas consumption has been hit by slowing domestic economic growth and by state policies that kept prices high for most of the year, even as the global oil prices that underpin long-term gas supply contracts slumped to less than half their 2014 peaks.

Chinese gas consumption grew 3.7 percent in the first 11 months of 2015, according to the latest data from China’s National Development and Reform Commission (NDRC). For full-year 2014, gas usage climbed 5.6 percent and 12.9 percent in full-year 2013.

“Gas production growth is constrained by demand,” said Zhu Chen of SIA Energy in Beijing, and “also impacted by the contracted piped gas and LNG imports.”

Excess contracted LNG supplies from Qatar and Papua New Guinea as well as piped gas imports from Central Asia have left China with surplus fuel that it has tried to sell off abroad after domestic demand slowed.

China’s economic growth in 2015 was the slowest in 25 years, data also showed on Tuesday, while oil demand grew 2.5 percent.

Chinese regulators cut wholesale gas prices by about 25 percent in November, the second reduction of the year, to boost domestic demand after previously raising prices to spur domestic production.

China’s supply of natural gas in the first eleven months outstripped demand by anywhere from 4.2 bcm to 8.4 bcm according to Reuters calculations using NBS and NDRC data respectively.

Gas imports grew 4.7 percent in the first eleven months to 54.4 bcm, data from the NDRC showed in December. LNG imports, which includes spot purchases, fell 1.6 percent over the same period, according to Customs data from last month.
Source: Reuters (Reporting by Adam Rose; Editing by Christian Schmollinger)

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