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Natural Gas Supplies Only Sufficient for 1/3 of Installed Capacity
By David Harman
04 Apr 2007 at 08:53 AM GMT-04:00
SHANGHAI (Intefax-China) -- China’s natural gas supply has failed to keep up with the expansion of gas-fired power plants, leading to a significant waste of resources, said an expert with the China University of Petroleum at an industry conference in Beijing.
"Only one-third of the installed capacity can be put into operation this year," according to Liu Yijun, a natural gas expert with the university. The university is a top industry research organization.
According to Liu, China’s aggregated installed capacity of natural gas power plants requires an annual natural gas supply of 30 to 50 billion cubic metres (bcm), exceeding the resources available in the domestic market for power generation.
"Though the government has put a limit on natural gas power project development, there has already been a good amount of investment capital injected into projects under construction, and [investors] are unlikely to reverse their plans," said Liu.
China National Petroleum Corp., the country’s top oil and gas producer, produced a total of 44 bcm last year.
In addition to power generation, residential and industrial demand for natural gas is also soaring, due to a runaway economy and the government’s campaign to increase its involvement in the country’s energy consumption, said Liu.
China is not rich in natural gas resources. With reserves of 2.27 trillion cubic metres (tcm), it ranks 15th in the world. Russia's 47.57 tcm of gas reserves are the world’s largest.
Today, China National Petroleum Corporation (CNPC), the parent of PetroChina Co Ltd (HK 0857), has set a 2007 natural gas output target of 54 bcm, up from 44.5 bcm in 2006.
China raised citygate natural gas prices by 13.27%to 1.28 yuan per cubic metre in August 2005.
Commentary
Given China’s limited domestic resources, this new plant capacity was always going to rely upon increased import of natural gas.
In the next decade, domestic reserves will be supplemented by expected imports of 60 to 80 bcm per year from Russia alone.
When China’s substantial LNG import contracts are added into the equation, the over capacity scenario doesn't look so disturbing.
© Interfax-China 2007.
Natural Gas Supplies Only Sufficient for 1/3 of Installed Capacity
By David Harman
04 Apr 2007 at 08:53 AM GMT-04:00
SHANGHAI (Intefax-China) -- China’s natural gas supply has failed to keep up with the expansion of gas-fired power plants, leading to a significant waste of resources, said an expert with the China University of Petroleum at an industry conference in Beijing.
"Only one-third of the installed capacity can be put into operation this year," according to Liu Yijun, a natural gas expert with the university. The university is a top industry research organization.
According to Liu, China’s aggregated installed capacity of natural gas power plants requires an annual natural gas supply of 30 to 50 billion cubic metres (bcm), exceeding the resources available in the domestic market for power generation.
"Though the government has put a limit on natural gas power project development, there has already been a good amount of investment capital injected into projects under construction, and [investors] are unlikely to reverse their plans," said Liu.
China National Petroleum Corp., the country’s top oil and gas producer, produced a total of 44 bcm last year.
In addition to power generation, residential and industrial demand for natural gas is also soaring, due to a runaway economy and the government’s campaign to increase its involvement in the country’s energy consumption, said Liu.
China is not rich in natural gas resources. With reserves of 2.27 trillion cubic metres (tcm), it ranks 15th in the world. Russia's 47.57 tcm of gas reserves are the world’s largest.
Today, China National Petroleum Corporation (CNPC), the parent of PetroChina Co Ltd (HK 0857), has set a 2007 natural gas output target of 54 bcm, up from 44.5 bcm in 2006.
China raised citygate natural gas prices by 13.27%to 1.28 yuan per cubic metre in August 2005.
Commentary
Given China’s limited domestic resources, this new plant capacity was always going to rely upon increased import of natural gas.
In the next decade, domestic reserves will be supplemented by expected imports of 60 to 80 bcm per year from Russia alone.
When China’s substantial LNG import contracts are added into the equation, the over capacity scenario doesn't look so disturbing.
© Interfax-China 2007.
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