Page 232 - 2019 White Paper on the Business Environment in China
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9 White Paper on the Business Environment in China
contrary, China’s state-owned oil companies Sinopec and cubic meters, according to the most recent BP Statistical
CNPC will enjoy a greater share of the market (Rick). Review. Together, China’s three biggest gas basins, the
Ordos in northern China, the Tarim in the Xinjiang region in
China overtook the US as the world’s largest importer the west, and Sichuan in the southwest, make up 90 percent
of crude oil in 2017. 2018 was even stronger. Until the of the country’s output. But each of them is affected with
beginning of the year, China had never imported more geological or technological difficulties (Chen).
than 37 million tons in any single month (Fickling). Sukrit
Vijayakar, director of energy consultancy Trifecta, said China expects to set new records for coal and
overall gasoline supplies in Asia were high, especially with natural gas production in 2018, but plans to reduce
China shipping out record volumes (Chen). Cross market coal consumption in the total primary energy mix while
trade of fuel between Asia and the Americas is one of raising the natural gas share, the Chinese National Energy
the most sophisticated physical commodities trade due Administration (NEA) said. In 2018, China’s natural gas
to the long distance and difference in fuel standard and production is expected to rise by 8.5 percent over 2017
pricing models. China is able to deliver the cargo using to a record high. The BP Energy Outlook 2018 estimates
charted ships in order to lock the spread between the China’s energy mix will continue to evolve with coal’s
two markets in a timely way. CNPC, parent of PetroChina, dominance declining from 62 percent in 2016 to 36
started selling its diesel to the Americas in 2015 due to percent in 2040, natural gas nearly doubling to 13 percent,
the domestic surplus. Exports have totaled more than and renewables’ share soaring from 3 percent in 2016 to
840,00 tons mid 2018, with destinations including Brazil 18 percent in 2040. The Chinese push to cut pollution and
and Peru (Mason and Meng). make millions of households switch to natural gas from
coal for heating resulted in China becoming the world’s
Natural Gas second-largest importer of liquefied natural gas (LNG)
in 2017, outpacing South Korea and second only behind
In 2018, China’s natural gas production is rising at the Japan. Despite China increasing its domestic production
fastest pace in four years but that will not be enough to and pipeline imports in 2017, natural gas shortages in
meet the demand for the fuel that has been unleashed northern China led to record levels of LNG imports during
through a government program to raise gas usage in the winter. Overall, natural gas imports accounted for
order to clean the country’s polluted air. According to 40 percent of China’s 2017 natural gas supply, and LNG
data from the National Bureau of Statistics (NBS), gas made up more than half of those imports (Paraskova).
output in China rose to a record 147.4 billion cubic meters
(bcm) in 2017, up 8.5 percent from 2016. Gas production Energy research firm Wood Mackenzie notes that
is forecast to climb as high as 8 percent per year through Chinese energy giants are making progress unlocking
2020, according to researchers at CNPC. But China’s war natural gas from shale rock formations, taking a step
against smog has spawned voracious demand for the fuel towards replicating the US shale revolution, but national
that will keep it reliant on growing imports of liquefied oil companies still have plenty of ground to cover before
natural gas or piped gas. they even approximate the level of success the America’s
shale pioneers have achieved. Over the last decade,
The consumption surge is a result of a government China’s natural gas production has risen to 9 billion cubic
drive to switch factories and millions of homes from meters. Wood Mackenzie forecasts that output will nearly
coal to gas in order to cut harmful emissions. China, the double to 17 bcm by 2020 as Chinese energy giants fine
world’s largest energy consumer, was the world’s sixth- tune advanced drilling methods tailored for their country.
largest gas producer in 2016 after rising investments over However, the Wood Mackenzie’s forecast are far short of
the past 20 years. However, consumption is surging even targets set by Beijing, as the country aimed to produce 30
faster, climbing 15 percent in 2017 to 237 bcm, according bcm of natural gas from shale by the turn of the decade
to the National Development and Reform Commission to cut its reliance on coal. Chinese oil companies would
(NDRC). China holds the world’s largest reserves of shale have to roughly double their activity to hit that target
natural gas, as the US Energy Information Administration. (DiChristopher, China Is Getting).
However, much of that gas is considered recoverable only
if cost were not a constraint. Furthermore, the country is But never say never when talking about China.
among the top ten holders of proven natural gas reserves, PetroChina Co. rallied the most in two years after
gas that could be produced at current prices, at 5.4 trillion regulators unveiled a new gas market policy that
232
contrary, China’s state-owned oil companies Sinopec and cubic meters, according to the most recent BP Statistical
CNPC will enjoy a greater share of the market (Rick). Review. Together, China’s three biggest gas basins, the
Ordos in northern China, the Tarim in the Xinjiang region in
China overtook the US as the world’s largest importer the west, and Sichuan in the southwest, make up 90 percent
of crude oil in 2017. 2018 was even stronger. Until the of the country’s output. But each of them is affected with
beginning of the year, China had never imported more geological or technological difficulties (Chen).
than 37 million tons in any single month (Fickling). Sukrit
Vijayakar, director of energy consultancy Trifecta, said China expects to set new records for coal and
overall gasoline supplies in Asia were high, especially with natural gas production in 2018, but plans to reduce
China shipping out record volumes (Chen). Cross market coal consumption in the total primary energy mix while
trade of fuel between Asia and the Americas is one of raising the natural gas share, the Chinese National Energy
the most sophisticated physical commodities trade due Administration (NEA) said. In 2018, China’s natural gas
to the long distance and difference in fuel standard and production is expected to rise by 8.5 percent over 2017
pricing models. China is able to deliver the cargo using to a record high. The BP Energy Outlook 2018 estimates
charted ships in order to lock the spread between the China’s energy mix will continue to evolve with coal’s
two markets in a timely way. CNPC, parent of PetroChina, dominance declining from 62 percent in 2016 to 36
started selling its diesel to the Americas in 2015 due to percent in 2040, natural gas nearly doubling to 13 percent,
the domestic surplus. Exports have totaled more than and renewables’ share soaring from 3 percent in 2016 to
840,00 tons mid 2018, with destinations including Brazil 18 percent in 2040. The Chinese push to cut pollution and
and Peru (Mason and Meng). make millions of households switch to natural gas from
coal for heating resulted in China becoming the world’s
Natural Gas second-largest importer of liquefied natural gas (LNG)
in 2017, outpacing South Korea and second only behind
In 2018, China’s natural gas production is rising at the Japan. Despite China increasing its domestic production
fastest pace in four years but that will not be enough to and pipeline imports in 2017, natural gas shortages in
meet the demand for the fuel that has been unleashed northern China led to record levels of LNG imports during
through a government program to raise gas usage in the winter. Overall, natural gas imports accounted for
order to clean the country’s polluted air. According to 40 percent of China’s 2017 natural gas supply, and LNG
data from the National Bureau of Statistics (NBS), gas made up more than half of those imports (Paraskova).
output in China rose to a record 147.4 billion cubic meters
(bcm) in 2017, up 8.5 percent from 2016. Gas production Energy research firm Wood Mackenzie notes that
is forecast to climb as high as 8 percent per year through Chinese energy giants are making progress unlocking
2020, according to researchers at CNPC. But China’s war natural gas from shale rock formations, taking a step
against smog has spawned voracious demand for the fuel towards replicating the US shale revolution, but national
that will keep it reliant on growing imports of liquefied oil companies still have plenty of ground to cover before
natural gas or piped gas. they even approximate the level of success the America’s
shale pioneers have achieved. Over the last decade,
The consumption surge is a result of a government China’s natural gas production has risen to 9 billion cubic
drive to switch factories and millions of homes from meters. Wood Mackenzie forecasts that output will nearly
coal to gas in order to cut harmful emissions. China, the double to 17 bcm by 2020 as Chinese energy giants fine
world’s largest energy consumer, was the world’s sixth- tune advanced drilling methods tailored for their country.
largest gas producer in 2016 after rising investments over However, the Wood Mackenzie’s forecast are far short of
the past 20 years. However, consumption is surging even targets set by Beijing, as the country aimed to produce 30
faster, climbing 15 percent in 2017 to 237 bcm, according bcm of natural gas from shale by the turn of the decade
to the National Development and Reform Commission to cut its reliance on coal. Chinese oil companies would
(NDRC). China holds the world’s largest reserves of shale have to roughly double their activity to hit that target
natural gas, as the US Energy Information Administration. (DiChristopher, China Is Getting).
However, much of that gas is considered recoverable only
if cost were not a constraint. Furthermore, the country is But never say never when talking about China.
among the top ten holders of proven natural gas reserves, PetroChina Co. rallied the most in two years after
gas that could be produced at current prices, at 5.4 trillion regulators unveiled a new gas market policy that
232
