Energy

China may escape gas shortage this winter

(Agencies)
Updated: 2010-11-15 16:03
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China is likely to escape a natural gas shortage this winter as supplies from Central Asia will increase and as the country steps up imports from the spot market, China Energy News reported on Sunday.

Hu Weiping, deputy director of Oil and Gas Deparment of the National Energy Amdinstration (NEA), told the paper that the government had asked China National Offshore Oil Corp (CNOOC) to secure gas from international markets to supply Shanghai, China's financial hub, so as to free up domestic gas for emergency needs.

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China was hit by severe gas shortages during last year's unusually early and cold winter, prompting factories to reduce or even close down production to divert gas to residents.

"I believe gas supplies this winter, though still slightly tight, would be able to meet the demand," Hu was quoted as saying.

Hu estimated that China's gas supplies would remain relatively tight till 2012 as it takes a few years for new gas supplies from Central Asia's Turkmenistan and via long-term supply agreements from exporters such as Qatar and Indonesia to reach their designated capacity.

However, Northern China could face natural gas shortages of 9 million cubic metres a day during peak winter demand, a PetroChina executive told state media on Monday, contradicting Hu's assurance.

PetroChina's two Shaanxi-to-Beijing pipelines are already running at full capacity, and the company is rushing to build a third pipe to meet an expected increase in winter demand, Lin Changhai, general manager of PetroChina's northern China gas sales unit, told official China Central Television.

The two pipelines in operation have shipping capacity of 56 mcm per day and existing underground stockpiles can supply 20 mcm a day, but gas consumption could increase to 89 mcm during peak time, the report said.

Demand in Beijing alone will grow to 58-60 mcm a day when the weather gets to the coldest, according to the report, prompting PetroChina to suggest that large users like department stores and restaurants look for ways to reduce gas use, the report added.