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China’s natural gas consumption may drop in 2022 for the first time in two decades amid a struggling economy, with demand this winter set to rise more modestly than in previous years, said Wang Jianping, a researcher with China National Offshore Oil Company, at a forum on Thursday.
Total gas demand is likely to fall 1% this year to 363.6 billion cubic metres, Wang said, marking the first annual decline since at least 2002.
According to CNOOC’s calculation, in a base scenario with moderate temperature and regular epidemic control measures, China’s natural gas supply to be loose this winter and gas demand this winter and next spring is expected to reach 174.9 billion cubic meters, falling by 0.6% from the same period a year earlier.
If the economy recovery is strong and temperature is lower than usual, China’s gas demand during this year’s heating season is expected to reach 185.3 billion cubic meters, rising by 5.3% from a year ago, according to CNOOC.
Even in the base scenario, gas supply in some days such as in December may be tight, said Wang.
According to data from PetroChina, China’s gas demand this winter may peak at 890 million cubic meters per day, rising by 6.3% from the peak of 837 million cubic meters last year.
Chinese gas companies are set to ramp up domestic production, fill up gas storage facilities and increase imports of cheaper pipeline gas from Russia and Central Asia while slashing high-priced LNG imports.
“Our winter supply policy is stabilizing piped gas imports from Central Asia, boosting volumes from Russia and increasing domestic production,” said Li Wei, a gas market executive with top state giant PetroChina, at the forum.
Zhao Kui, a gas marketing executive at Sinopec Corp, said Sinopec is pumping at full capacity from its main fields — Yuanba and Puguang– in southwestern Sichuan basin after completing regular maintenance.
Sinopec is also replenishing LNG inventories at two large import terminals in Tianjin and Qingdao with storage levels at 80% or above by mid-November.
China has so far established gas storage capacity of 26 bcm, equivalent to 7% of total demand, to cope with peak winter heating demand, said Wang Jianping, the CNOOC researcher.