China Gas

By: EconomyWatch   Date: 30 June 2010

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As the Chinese government seeks to reduce pollution while increasing energy production, the China gas industry is gaining increasing importance. Gas production reached 76.1 billion cubic metres (bcm) in 2008, and with an increasing number of gas reserves in the nation that figure will only grow.

Key China Gas Reserves

Chinese Onshore Gas Reserves: Songliao basin, Sichuan basin, Junggar basin, Tarim basin and Ordos basin.

Chinese Offshore Gas Reserves: Bohai bay, Yinggehai basin, East China Sea basin and Sichuan basin. The Sichuan basin, which was discovered in 2007, has gas reserves of 3.8 trillion cubic meters.

The production of gas in China increased to 60 Bcm in 2006 from 26.2 Bcm in 2000, while gas consumption increased at a 13.8% average growth rate per annum to 46.8 Bcm in 2005 from 24.5 Bcm in 2000. In 2007, gas consumption increased by 19.1% to 67.3 bcm.

China Gas Companies

The major companies that dominate the China gas industry include:

  • China National Petroleum Corporation (CNPC) is the largest supplier of gas in China, in terms of its production and reserves. The company holds interests in vast gas reserves in the western and central parts of China. In 2008, the domestic production of CNPC was 61.7bcm. The CNPC gas pipeline is 22,000 kms long, which accounts for 80% of the gas pipelines in China.

  • Sinopec is the second largest gas supplier in China. It was awarded the top rank in the Top 500 Enterprises of China in 2007. The company has marked a year on year increase of 36.5% in gas and oil production.

  • China National Offshore Oil Corporation (CNOOC) is a publicly traded gas and oil producer and third largest in the country.

Prospects of the China Gas Industry

The National Development and Reform Commission (NDRC) of China has estimated that the domestic supply of gas would reach 180bcm per year, while demand would reach at 210 Bcm per year by 2020.

To meet the increasing demand at home, the construction of the connection of the Central Asia gas pipeline and the second east-west gas pipeline was started in 2008 and is slated to be completed by the end of 2009. The annual capacity of these pipelines will be 30bcm. Gas giant CNPC expects to start another gas pipeline of 21,000 kms by 2015. The pipeline will cover the major regions of the country.

Moreover, two more gas pipelines will be in operation by 2011, according to the 2006 Russia-China deal, signed by Gazprom and CNPC.


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