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China: energy demand to drive Pacific LNG growth

https://www.chemnet.com   Jul 28,2010
Fueled by its soaring demand for energy, China's demand for liquefied natural gas will increase by 48 percent in 2020 and is driving Pacific LNG growth, says a new study.


"Race for Supply -- the Future of China's Gas Market," by Wood Mackenzie Consultants finds that China's reliance on unconventional gas -- particularly shale -- will increase significantly to meet its strong gas growth.


But domestic unconventional gas resources will take a "significant" time to develop, the study says, so in the meantime China will have to import large amounts of LNG and piped gas.


Gavin Thompson, Wood Mackenzie's China gas study director calls shale gas "the major growth story" in China. As the country's national oil companies boost their unconventional gas activity, he said in a news release, they would be seeking partnerships and technologies for the initial phase of development.


This represents "a near-term window of opportunity for International oil companies to gain access to China's onshore acreage and to leverage skills honed in North America," Thompson said.


Earlier this month China Petroleum & Chemical Corp. announced it had launched a new division for the exploration of shale gas in Southwest China.


China Business News projected that Sinopec's annual shale gas output could reach 2.5 billion cubic meters in five years.


The IEA estimates China's shale gas reserves are about 26 trillion cubic meters.


Before development of domestic unconventional gas is completed, however, Wood Mackenzie forecasts China's coal bed methane, coal-based synthetic gas and shale gas imports to reach more than 11 billion cubic feet per day by 2030.


The Wood Mackenzie report comes after new data from the International Energy Agency shows that China had surpassed the United States as the world's biggest energy user.


The IEA said China consumed the equivalent of 2.25 billion tons of oil last year from sources such as coal, oil, natural gas, nuclear power and hydropower.
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