PetroChina expects tight global natural gas supply to ease in 2022

The tight supply situation of natural gas in the global markets is expected to ease to a certain extent in 2022 as production growth is forecast to outpace demand, said Luo Yizhou, vice president of PetroChina International Co. Ltd, a subsidiary of state-owned PetroChina.

“With the normalization of COVID-19 pandemic prevention and control measures, the continuous recovery of the world economy, and the stabilization of international oil prices, global natural gas demand is estimated to grow to around 4.070 trillion cu m in 2022, up 2.3% year on year,” Luo said at the 10th China International Oil and Gas Trade Congress in Shanghai Nov. 8.

“On the other hand, global natural gas production is expected to be 4.12 trillion cu m in 2022, up 4% year on year,” he said, expecting the tight gas supply to ease based on that scenario.

The tight supply has pushed up global gas prices in 2021, with the benchmark JKM, TTF and NBP all rising to historical highs in the September-October period.

“Supply has not been able to keep up with the rebound in demand post pandemic,” said Chris Midgley, global head of analytics with S&P Global Platts, at the conference. This was the main reason that caused the tight natural gas supply situation this year, Midgley said.

Global demand for natural gas is expected to grow steadily in the next few decades due to accelerated actions against climate change.

“About 50% of the incremental global natural gas demand will come from Asia by 2035, with China and India as the main engines to boost the development of the LNG market,” Luo said.

“Natural gas will play a very important role in the energy transition. We expect the global natural gas demand to grow to around 6.1 trillion cu m in 2050 while China’s natural gas consumption will be around 670 billion cu m in the same year,” he said, and adding that China’s natural gas demand is expected to peak in 2040.

Energy transition
PetroChina targets reaching peak carbon by 2025, and the company is scheduled to have a changeover to renewable energy by 2035 and a near-zero emissions and green transformation by 2050, according to Luo.

“In addition to the existing LNG long term contracts, PetroChina will purchase spot natural gas and the overseas equity in a bid to diversify the natural gas resources,” Luo said.

“And the company also plans to construct LNG terminals and natural gas power plants globally, as well as building LNG resource pools to improve the natural gas allocation and supply ability,” Luo added.

PetroChina also would adapt to the energy transition trend, shifting from a traditional oil and gas trader to a trading company of oil, gas and renewable energy.

China’s peak carbon and carbon-neutrality targets of 2030 and 2060, respectively, have promoted the development of new trading categories, such as carbon emissions trading. PetroChina will monitor the progress of domestic carbon futures, and participate in their trading to help its subsidiaries lower the cost of compliance, Luo added.
Source: Platts