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Natural gas demand has surged in China with industrial and winter heating consumption rising. Replacement of coal with natural gas with Chinese clean air reforms are making coal supplies scarce. Natural gas consumption in the first 11 months of 2017 continues to soar, China saw a 18.9% year-on-year rise in natural gas consumption.

China Natural Gas Demand Sectors

Chinese gas consumption totaled 209.7 billion cubic meters in the January-November period, according to the National Development and Reform Commission (NDRC). This growth was 12 % higher than that in the first half of the year. Right now the demand is travelling more than 8% higher than the average growth in the previous five years, NDRC spokesperson Meng Wei said at a press conference.

Imported Natural Gas is Meeting Extra Demand

During the first 11 months of 2017,

  • Domestic natural gas output rose 10.5 % year on year to 133.8 billion cubic meters
  • Imported natural gas rose 28.9 % year on year

Meng said millions of households changed to gas instead of coal for heating this winter to help combat air pollution. To better meet household demand, gas supply for industrial use will be reduced moderately, said Meng.

The U.S. Energy Information (EIA) said back in that administration Global natural gas consumption is expected to grow from 340 billion cubic feet per day (Bcf/d) in 2015 to 485 Bcf/d by 2040, primarily in countries in Asia and in the Middle East, based on projections in EIA’s latest International Energy Outlook 2017 (IEO2017). China accounts for more than a quarter of all global natural gas consumption growth between 2015 and 2040.

Global Natural Gas Consumption

China's major state-owned oil firms have been told to maximize production at domestic gas fields.

China Natural Gas Supply

Xu Bo, a senior analyst with China National Petroleum Corporation's Economics and Technology Research Institute, estimated that natural gas use is expected to reach 230 billion cubic meters this year, with 20 billion cubic meters coming from the coal-to-gas transition.

Xu projected a growth rate of 17 percent for natural gas consumption this year, compared with 7 percent last year.

Source: Xinhua, EIA

From The TradersCommunity Research Desk

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