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Economic slowdown lowers rise in gas use to 9%

China Daily, December 18, 2014 Adjust font size:

Natural gas consumption growth in China is estimated at 9 percent this year, the first time that expansion has been in the single-digit range since 2007, experts said on Wednesday.

During the 13th Five-Year Plan (2016-20), consumption will rise only about 8 percent annually on average, said Qian Xingkun, vice-president of CNPC Economics and Technology Research Institute, an energy think tank run by the China National Petroleum Corp.

He offered the figures during the Third Asian Gas Market Forum in Beijing.

"Because of China's economic slowdown, annual growth in the nation's natural gas consumption will no longer run at double-digit levels," he said.

He estimated that this year's natural gas use will grow 9 percent to 183 billion cubic meters.

Gas consumption will continue rising, but it won't reach the levels that were previously forecast by the government. Consumption will be 200 bcm in 2015 and 300 bcm in 2020, Qian said.

Due to China's rapid economic growth and environmental protection efforts, natural gas demand has increased in recent years.

Consumption growth exceeded 10 percent in 2007. By 2011, the expansion rate had more than doubled to some 20 percent, which pushed up imports.

Even last year, demand was still expanding relatively rapidly. China used 168 bcm of natural gas in 2013 with annual growth of 13.9 percent. Imports accounted for more than 30 percent of the market for the first time in 2013.

But consumption growth has slowed in tandem with weaker economic expansion.

According to the National Development and Reform Commission, the top economic planner, China used 63.2 bcm of natural gas in the first half of this year, up 7.5 percent year-on-year.

Yang Lei, deputy director of the oil and gas department at the National Energy Administration, said that China needs to establish a natural gas trading market.

Wang Zhigang, senior vice-president of China Petroleum &Chemical Corp (Sinopec), said that the nation's gas consumption structure is improving as its growth slows.

According to Wang, Sinopec has "ambitious" shale gas development plans for the 13th Five-Year Plan period. It aims to achieve annual output of 10 bcm by 2020.

Tu Jianjun, China program manager of the International Energy Agency, said it is urgent for China to establish an influential natural gas trading center.

"The country's natural gas pricing mechanism should be improved as well to reflect the diversification of the country's gas supplies," he said.

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