Page 184 - 2023 White Paper on the Business Environment in China
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3 White Paper on the Business Environment in China
that gripped China earlier in the year amid the of the LNG resales dimmed. Another potential
lockdowns began to recover and refining rates trigger for the move were forecasts for a small
started to rise. Gasoline consumption also picked deficit in China's gas supply as the country looks
up and lead the rebound in fuel demand. Chinese to avert its own potential energy crunch during
refiners were beginning to consider an increase in winter's cold months. Countries like Germany are
their run rates, anticipating stronger fuel demand on track to hit their winter gas inventory targets,
and exports during the fourth quarter of 2022. after appealing for consumers to cut usage and
There were expectations for fuel export quotas scrambling to secure alternative supplies to those
to the tune of 15 million tons for the final quarter cut off by Russia (Tayeb).
of the year probably in a bid to reverse a decline
in these exports. Imports were also on the rise. Then, China started buying up America’s
In August 2022, data showed that China boosted natural gas — sparking worries across Washington
imports from Russia and Saudi Arabia, with the and fueling a potential new clash between the
Kingdom retaining the top spot among China’s two global powers. Chinese energy companies
suppliers. Shipments from both the Middle East are the fastest growing customers of American
and the U.S. were on the rise (Slav). natural gas exports, purchasing nearly half the
gas that US companies agreed to ship in 2021.
Natural Gas As tensions between Washington and Beijing rise
— and high natural gas prices squeeze American
China's importers moved out of the spot market manufacturers — lawmakers from both parties are
in October 2022 as demand growth skidded to calling for the White House to consider new limits
the slowest since 2002, meaning the world's on the gas sales to China. They want more Chinese
top importer of the fuel avoided competing energy companies added to a trade blacklist and
with crisis-hit Europe for supplies. That reduced they’re calling for the Biden administration to close
demand means China yielded its top importer title a loophole that allows one major company already
back to Japan for the year, easing pressure on the on that list to buy American gas and oil (Blade).
global market and offering much-needed relief
to Europe, which is scrounging for cargoes after Meanwhile, China National Offshore Oil Corp.
top supplier Russia cut pipeline gas flows amid (CNOOC) has made a large offshore natural gas
the Ukraine crisis (Chow and Chen). But Beijing discovery in the South China Sea as it continues
reportedly told state-owned natural gas importers to work toward adding oil and gas reserves.
to halt resales of cargoes to buyers in Europe Proven gas in-place of the Baodao 21-1 field has
and Asia, to make sure China had enough supply “successfully passed the Chinese governmental
for domestic needs this winter. An economic review and filing,” the firm said. CNOOC says the
slowdown in China after Beijing imposed a strict field holds 50 billion cubic meters of natural gas.
zero-COVID policy dampened local demand for The find is considered the biggest discovery in
gas, leaving its importers with a surplus of natural more than half a century in the Songnan–Baodao
gas that they resold to Europe and elsewhere. Sag area of the Qiongdongnan basin, in the western
They threw a lifeline to Europe amid its energy South China Sea. The discovery well Baodao 21-
crisis by reselling unneeded LNG purchased from 1-1 was completed at a depth of 5,188 meters,
Russia. In August 2022, an estimated more than encountering 113 meters of pay zone. The well is
4 million tons of Chinese LNG was resold — or set to produce 587,000 cubic meters/day (Lenton).
roughly 7% of Europe's imports in the first half
of the year. Since the Ukraine invasion, China has Iron and Steel
been snapping up Russian fuel on the cheap, after
sanctions and boycotts hit the Western market. At China's current steel production capacity is
one point, China managed to get a 50% discount on 1.2 billion tons a year, with annual consumption
LNG supply from Russia's Sakhalin 2 export plant. hovering around 1 billion tons. But for China's steel
But with European gas inventories quickly filling industry, winter arrived early 2022 and was shaping
up and shipping costs at record highs, the appeal up to be one of the harshest in years, with a slowing
184
that gripped China earlier in the year amid the of the LNG resales dimmed. Another potential
lockdowns began to recover and refining rates trigger for the move were forecasts for a small
started to rise. Gasoline consumption also picked deficit in China's gas supply as the country looks
up and lead the rebound in fuel demand. Chinese to avert its own potential energy crunch during
refiners were beginning to consider an increase in winter's cold months. Countries like Germany are
their run rates, anticipating stronger fuel demand on track to hit their winter gas inventory targets,
and exports during the fourth quarter of 2022. after appealing for consumers to cut usage and
There were expectations for fuel export quotas scrambling to secure alternative supplies to those
to the tune of 15 million tons for the final quarter cut off by Russia (Tayeb).
of the year probably in a bid to reverse a decline
in these exports. Imports were also on the rise. Then, China started buying up America’s
In August 2022, data showed that China boosted natural gas — sparking worries across Washington
imports from Russia and Saudi Arabia, with the and fueling a potential new clash between the
Kingdom retaining the top spot among China’s two global powers. Chinese energy companies
suppliers. Shipments from both the Middle East are the fastest growing customers of American
and the U.S. were on the rise (Slav). natural gas exports, purchasing nearly half the
gas that US companies agreed to ship in 2021.
Natural Gas As tensions between Washington and Beijing rise
— and high natural gas prices squeeze American
China's importers moved out of the spot market manufacturers — lawmakers from both parties are
in October 2022 as demand growth skidded to calling for the White House to consider new limits
the slowest since 2002, meaning the world's on the gas sales to China. They want more Chinese
top importer of the fuel avoided competing energy companies added to a trade blacklist and
with crisis-hit Europe for supplies. That reduced they’re calling for the Biden administration to close
demand means China yielded its top importer title a loophole that allows one major company already
back to Japan for the year, easing pressure on the on that list to buy American gas and oil (Blade).
global market and offering much-needed relief
to Europe, which is scrounging for cargoes after Meanwhile, China National Offshore Oil Corp.
top supplier Russia cut pipeline gas flows amid (CNOOC) has made a large offshore natural gas
the Ukraine crisis (Chow and Chen). But Beijing discovery in the South China Sea as it continues
reportedly told state-owned natural gas importers to work toward adding oil and gas reserves.
to halt resales of cargoes to buyers in Europe Proven gas in-place of the Baodao 21-1 field has
and Asia, to make sure China had enough supply “successfully passed the Chinese governmental
for domestic needs this winter. An economic review and filing,” the firm said. CNOOC says the
slowdown in China after Beijing imposed a strict field holds 50 billion cubic meters of natural gas.
zero-COVID policy dampened local demand for The find is considered the biggest discovery in
gas, leaving its importers with a surplus of natural more than half a century in the Songnan–Baodao
gas that they resold to Europe and elsewhere. Sag area of the Qiongdongnan basin, in the western
They threw a lifeline to Europe amid its energy South China Sea. The discovery well Baodao 21-
crisis by reselling unneeded LNG purchased from 1-1 was completed at a depth of 5,188 meters,
Russia. In August 2022, an estimated more than encountering 113 meters of pay zone. The well is
4 million tons of Chinese LNG was resold — or set to produce 587,000 cubic meters/day (Lenton).
roughly 7% of Europe's imports in the first half
of the year. Since the Ukraine invasion, China has Iron and Steel
been snapping up Russian fuel on the cheap, after
sanctions and boycotts hit the Western market. At China's current steel production capacity is
one point, China managed to get a 50% discount on 1.2 billion tons a year, with annual consumption
LNG supply from Russia's Sakhalin 2 export plant. hovering around 1 billion tons. But for China's steel
But with European gas inventories quickly filling industry, winter arrived early 2022 and was shaping
up and shipping costs at record highs, the appeal up to be one of the harshest in years, with a slowing
184
