New sources can alleviate shortages: experts

Taxies queue in a long line waiting for natural gas in front of a station in Xi'an, capital of Northwest China's Shaanxi Province on December 6. (Image by VCG)

Major Chinese gas providers will increase supplies to cope with the emergency natural gas shortage in certain parts of China this winter, particularly in northern provinces where heating is supplied in a unified manner.

Experts also noted that China's increasing energy cooperation with other countries - particularly the east line of the China-Russia Natural Gas Pipeline, which is currently under construction - will help alleviate natural gas shortages in the future.

State-owned Sinopec Group will arrange full-capacity production at its subordinate oil and gas fields, according to a statement it sent to the Global Times on Wednesday.

The company will supply 15.1 billion cubic meters of natural gas this winter and next spring, up 13 percent year-on-year, the statement said.

The company will also take measures such as arranging liquefied natural gas (LNG) imports, speeding up exploitation of shale gas and controlling industrial usage of gas to guarantee supply for civil use, it said.

Another leading supplier, China National Petroleum Corp (CNPC), also plans to increase production and supply of natural gas, according to a statement it published on its official website on Saturday. CNPC didn't offer further comment as of press time.

The CNPC statement noted that for this winter and the upcoming spring, it is planning to supply 20.55 billion cubic meters of natural gas, up 19.3 percent year-on-year.

Over-hasty move to gas

The increase in gas production and supply is urgently needed following shortages in certain parts of China recently, particularly some provinces in North China such as Hebei and Shanxi, according to domestic media reports.

Guan Dali, an analyst at First Futures, told the Global Times on Wednesday that some of his friends in Shanxi are barely able to use gas burners to cook because of shortages.

A report from cyol.com on December 5 also said that some rural primary schools in Baoding, North China's Hebei Province didn't have heating for weeks after the heating season began, and students had to take lessons outside to get some warmth from the sun.

According to Guan, the recent gas shortage is a result of the government call to replace coal with natural gas out of environmental protection concerns.

"Too many places, and some of them ahead of the replacement schedule, are rushing to transform coal devices into gas devices. This has caused China's already tight gas supply to become even tighter," he said.

Some local governments have taken measures to cope with the supply shortage. A cyol.com report on Monday cited Liang Yike, an official at the Hebei Development and Reform Commission, as saying on Monday that the local government would actively strive to boost its gas sources. A natural gas emergency support center has also been set up in Hebei to provide emergency gas supplies.

New pipeline will help

Sun Yang, a natural gas analyst at bulk commodity service provider chem365.net, told the Global Times on Wednesday that in the longer term, there are several ways to cope with natural gas shortages in China.

"First, major domestic energy providers like Sinopec should increase production at gas fields and construct more natural gas pipelines. Second, China should import more natural gas, particularly LNG because LNG can be shipped overseas and therefore does not require too much transportation hardware like pipelines," she said.

Sun also pointed out that China's efforts to increase gas import sources, such as constructing the east line of the China-Russia Natural Gas Pipeline, as well as mounting energy cooperation with the US, would help alleviate the situation.

A CNPC statement on Wednesday noted that construction of the east line of the China-Russia Natural Gas Pipeline will be completed in 2020.

The pipeline will be used to ship 38 billion cubic meters of natural gas from Russia to China annually for at least 30 years.

Sun also predicted that in 2018, the scale of coal-to-gas replacement will be smaller. "I think the government will take [shortages] into consideration in carrying out gas replacement plans, but in the long run, the replacement will be an inevitable trend," she noted.

(Source: Global Times)