Analysis on the Statistics of Gas Supply Growth in China in 2011

In response to the natural gas supply problem this winter and next Spring, CNPC said yesterday that it is ready for insurance. The natural gas supply of China’s oil will increase by more than 25% over the same period of last year during the winter, spring and spring, and CNPC will continue to increase the import of natural gas from Central Asia to ensure domestic supply.

PetroChina did not disclose the specific increase in gas supply throughout the country yesterday, but PetroChina said that supply to Beijing will increase by more than 20% year-on-year.

Prior to this, the Development and Reform Commission disclosed data that in the first three quarters of this year, the total domestic natural gas resource supply was 93.7 billion cubic meters, an increase of 15.6 billion cubic meters compared with the same period of last year, an increase of 20%, and supply and demand remained stable overall. The responsible person of the National Development and Reform Commission recently stated that with the successive launch of long-distance pipelines such as the Shaanxi-Beijing Third Line, the Qinshen Line, the Second West-East Gas Pipeline Project, and the Rongji Line, the Jiangsu Rudong LNG project will be put into production and operation, and this winter and next spring will appear. It is unlikely that there will be a range of supply tensions. However, due to the large number of new users, rapid growth in consumer demand and limited capacity for gas storage and peak shaving, if there is a sustained increase in demand for low-temperature weather and gas for power generation, some regions are still facing greater pressure during peak winter seasons.

PetroChina is currently the largest natural gas supplier in China and its production is close to 80% of the country's total. According to the three quarterly report just disclosed by PetroChina, the profit of CNPC's natural gas segment decreased by 17% due to the loss of imported natural gas in the first three quarters. As for whether the import loss will affect the oil companies’ guarantees, relevant CNPC sources stated that it is the responsibility of the central SOEs to ensure supply.

Some analysts pointed out that although natural gas imports have suffered losses at present, the overall dependence on natural gas is only about 23%, which accounts for a small proportion of the total consumption of natural gas and cannot be compared with the loss of tens of billions of yuan for the refining sector. There will be no "gas shortage" due to import losses.

Yang Jianhong, deputy director of the Oil and Gas Pipeline Research Institute of China Petroleum Planning Institute, said that the key to solving the problem of domestic natural gas shortages in winter is to increase the construction of underground gas storage. At present, the total storage capacity of underground gas storages in China is 3 billion square meters, and the effective working gas volume is close to 2 billion cubic meters, accounting for less than 2% of the national consumption. The ability to adjust reserves during the peak period of use of gas is obviously insufficient.