China’s 2020 Gas Supply to Peak at 360 Billion m3

On January 19, the National Development and Reform Commission of China (NDRC) issued the 13th Five-Year Plan for Petroleum Industry (2016-2020). Natural gas is to provide a higher proportion of the energy consumed over the next five years and finally develop to a principal energy source, in accordance with the plan, which accordingly calls for establishing a sound industrial system for natural gas.
The plan calls for constructing 40 000 kilometers of main and ancillary lines during the plan period, with the total length to reach 104 000 kilometers by 2020. Transport capacity of main lines is to exceed 400 billion m3/a, and the supply capacity of natural gas is to exceed 360 billion m3/a, both by 2020.
Proven reserves of conventional gas are to increase by 3 trillion m3 during the present FYP period (total proven reserves to reach 16 trillion m3 by 2020), those of shale gas will reach 1 trillion m3 (proven reserves to exceed 1.5 trillion m3 by 2020), and those of coalbed methane will reach 420 billion cubic meters (proven reserves to exceed 1 trillion m3 by 2020), according to the plan.
The plan sets forth four tasks: accelerating exploration to increase supply of natural gas, speeding up construction of natural gas pipeline networks, promoting construction of storage facilities, propelling expanded & efficient utilization of natural gas.

Conventional gas

Exploration focuses for onshore natural gas include Sichuan, Ordos and the Tarim Basin, with the combined output of the three regions to reach around 120 billion m3 by 2020. Ordos and Sichuan will generate around 37 billion cubic meters of tight gas in 2020. As for marine natural gas, the plan calls for establishing 10 billion m3 scale production bases.

Unconventional gas

Domestic output of shale gas is to reach 30 billion m3 by 2020. Construction of state demonstration zones like Changning-Weiyuan (Sichuan), Fuling (Chongqing), Zhaotong (Yunnan) and Yan’an (Shaanxi) will accelerate. Further, natural gas players will work harder to explore promising regions such as Weiyuan-Rongxian, Rongchang-Yongchuan, northeastern Guizhou and central Hunan.
Coalbed methane output is to reach 10 billion m3 by 2020. While constructing industrial bases for coalbed methane in the Qinshui Basin, eastern Ordos Basin and Guizhou Bijie-Liupanshui-Xingyi economic zone, industry players will also be very concerned about exploration in Inner Mongolia and Xinjiang.
The plan calls for elevating natural gas to around 10% of total energy consumption by 2020, via gasification projects, gas power generation & distributed energy projects, gasification projects in traffic area and energy conservation & substitution projects in required air pollution treatment regions.
China’s natural gas industry faces many challenges like less investors, administrative monopoly, outdated policies and insufficient national support in some fields. However, natural gas is a clean, low-carbon energy source. Boosting the proportions of natural gas and clean energy consumption is inevitable to help China replace existing principal energy sources and establish a safer & more efficient energy system.