In February 2017, the Ministry of Science and Technology revealed that China is now the sixth biggest natural gas producer in the world – three places higher than in 2007. Gas output expanded from 68 billion cubic meters in 2007 to 137 billion cubic meters in 2016. While proven reserves of natural gas surged from 6.1 trillion cubic meters in 2007 to 13 trillion cubic meters in 2016 – placing the country ninth in the world. Natural gas now accounts for 6% of China’s primary energy consumption, with the figure expected to rise to almost 10 % by 2020.
The desire to grow
China’s new energy plans act on earlier promises to reform the country’s Oil & Gas Industry and was approved by the Central Committee of the Communist Party of China (CPC) and the State Council on Sunday, according to China’s Global Times.
As part of new plans, China’s government announced this week that it will allow private companies to invest in the country’s oil and gas storage sector. The State Council admitted it will increase government investment in the country’s own oil storage facilities, while also allowing non-state firms to operate storage. Although no further details were released.
As China continues to look at how best to meet the growing demand of its citizens and open its Oil & Gas Industry to other countries, natural gas remains a major focus.
After an executive from U.S. liquefied natural gas (LNG) exporter Cheniere Energy Inc. spoke at a conference in Beijing last week, the first question from the audience was an invitation to visit one of China’s biggest energy firms and a main LNG buyer, the state-owned giant known as Sinopec.
The exchange highlighted a budding relationship between U.S. gas sellers and Chinese buyers after an agreement struck this month by the Trump administration and President Xi Jinping’s government welcomed the Asian country’s investments and purchases of American gas.
A promising partnership
“The trade deal paves the way for Chinese support into U.S. LNG in both existing and potential future projects,” said Kerry Anne Shanks, an analyst at Wood Mackenzie – including immediate LNG sales or signing long-term contracts to underpin the financing of new plants.
China National Petroleum Corp. (CNPC) Chairman Wang Yilin said earlier this month that the country’s biggest oil and gas company wants to import more U.S. supplies and will consider participating in projects. While Sinopec’s trading unit, Unipec, is also considering the U.S as a producer for possible long-term LNG contracts starting in 2022.
China oil explorers are not the only ones being lured by cheap, plentiful reserves and the possibility of greater sales from America. Qatar Petroleum International Ltd. has now teamed up with Exxon Mobil Corp. to build a $10 billion natural gas export plant in Texas – winning approval by federal energy regulators in December.
