Natural gas is a fossil fuel majorly comprising methane. Like other fossil fuels, it is formed deep beneath the earth’s surface on account of the decomposition of dead plants and animals under extreme heat and pressures. Natural gas is cleaner than most other fossilized fuels. However, its calorific value is lower than the fossil fuels such as petrol, diesel, LPG.

CHINA LIQUEFIED NATURAL GAS (LNG) MARKET

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Natural gas is a fossil fuel majorly comprising methane. Like other fossil fuels, it is formed deep beneath the earth’s surface on account of the decomposition of dead plants and animals under extreme heat and pressures. Natural gas is cleaner than most other fossilized fuels. However, its calorific value is lower than the fossil fuels such as petrol, diesel, LPG.

china-liquefied-natural-gas-market

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The relative cost competitiveness of natural gas in the industrial and transportation sectors, environmental policies, and strong economic growth contribute to the expansion of China’s natural gas industry. The country’s total proven reserves as of 2020 are 8.40 trillion cubic meters.

The efforts established by China in terms of diversifying its coal-dominated energy mix drive the usage of natural gas in the country. In this regard, in 2020, natural gas accounted for 8.18% of China’s primary energy consumption.

PipeChina, formerly China Oil and Gas Pipeline Network Corporation, engaged in oil and gas pipeline network operations, began construction on the $1.3 billion natural gas mainline in north China in 2021. Also, the entirety of the China-Russia east route is a pipeline infrastructure stretching over 8,000 kilometers. It facilitates the transportation of natural gas from Siberia to nine Chinese provinces.

Despite generating a significant portion of its fossil fuel usage, China has progressively increased its reliance on imported oil, gas, and LNG since the mid-1990s. The natural gas market in China remained isolated from the rest of the world until 2006, when the country’s first LNG receiving station was constructed in Guangdong province. Subsequently, China began importing pipelined natural gas from Turkmenistan in 2010.

China National Offshore Oil Corporation (CNOOC) owns and operates the vast majority of the country’s LNG terminals. The remaining LNG terminals are owned and operated by Sinopec, CNPC, and other non-national oil corporation (NOC) organizations. Thus, only a few Chinese terminals are owned (wholly or partly) by a non-NOC.

However, there is a rising need for the establishment of new terminals across various circles, held entirely or partially by non-NOC businesses. In this regard, non-NOC participants have proposed several such terminals, currently under various levels of national approval and permission.

Since LNG is highly flammable and major exporting takes place through the sea, numerous regulations must be followed by industry players. Key regulatory authorities governing the LNG industry in China include the Ministry of Ecology and Environment, the National Energy Commission, the Ministry of Natural Resources, and the National Development and Reform Commission (NDRC).

The leading LNG companies in the country are Sinopec Shanghai Petrochemical Co Ltd, China National Petroleum Corporation (CNPC), China National Offshore Oil Corporation (CNOOC), Beijing Enterprises Holdings Limited, Shenergy Group Company Limited, and others.

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    1. CHINA LNG MARKET: EXECUTIVE SUMMARY
    2. CHINA OVERALL ECONOMIC CONDITIONS
    3. CHINA PRIMARY ENERGY CONSUMPTION
    4. NATURAL GAS
      • CHINA NATURAL GAS TOTAL PROVED RESERVES, PRODUCTION, AND CONSUMPTION
        • TOTAL PROVED RESERVES
        • NATURAL GAS PRODUCTION
        • NATURAL GAS CONSUMPTION
    1. LIQUIFIED NATURAL GAS
      • VALUE CHAIN ANALYSIS
        • EXPLORATION AND PRODUCTION
        • LIQUEFACTION
        • SHIPPING
        • STORAGE AND REGASIFICATION
        • END-USERS
      • TRADE
        • IMPORTS
      • LNG TERMINALS
        • LIST OF LNG IMPORT TERMINALS
      • REGULATORY FRAMEWORK FOR LNG

    LIST OF TABLES

    TABLE 1: CHINA NATURAL GAS PRODUCTION, 2016-2020 (IN EXAJOULES)

    TABLE 2: CHINA NATURAL GAS CONSUMPTION, 2016-2020 (IN EXAJOULES)

    TABLE 3: CHINA LNG IMPORTS, 2016-2020 (IN BILLION CUBIC METERS)

    TABLE 4: LNG IMPORT TERMINALS, EXISTING

    TABLE 5: LNG IMPORT TERMINALS, NOT YET BUILT

    TABLE 6: REGULATORY FRAMEWORK

    LIST OF FIGURES

    FIGURE 1: CHINA GROSS DOMESTIC PRODUCT, 2016-2020 ($ BILLION)

    FIGURE 2: PRIMARY ENERGY CONSUMPTION, BY FUEL TYPES, 2019 & 2020 (IN %)

    FIGURE 3: PRIMARY ENERGY CONSUMPTION, 2016-2020 (EXAJOULES)

    FIGURE 4: CHINA NATURAL GAS TOTAL PROVED RESERVES, 2000, 2010, AND 2020 (IN TRILLION CUBIC METERS)

    FIGURE 5: CHINA NATURAL GAS PRODUCTION VS CONSUMPTION, 2016-2020 (IN EXAJOULES)

    FIGURE 6: VALUE CHAIN ANALYSIS

    CHINA GROSS DOMESTIC PRODUCT, 2016-2020, ($ BILLION)

    china-lng-market-GDP

    GDP (constant 2010 US$)
    Source: World Bank

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