China’s seemingly endless thirst for natural gas is on a collision course with not only U.S.-based liquefied natural gas (LNG) project developments, but others as well, including Russia and Australia, in a move that is revolutionizing global markets for the super-cooled fuel.
Per China’s government mandate to replace coal-based power generation with natural gas, the cleaner burning fuel is set to make up at least 10 percent of the country’s energy mix by 2020, with further earmarks after that.
Not only is China’s pivot away from coal to natural gas changing natural gas market dynamics, both piped gas and LNG, it is also causing a knee jerk response among the country’s state-owned oil majors.
Yesterday, state-owed Sinopec Group said that it aims to more than double its receiving capacity for LNG over the next six years. The company will add new LNG receiving facilities along China’s east coast for a total of 26 million tonnes annually by 2023, up from the current 9 million tonnes. Currently, China has 17 LNG import receiving terminals.
The company also wants to increase its domestic shale gas production by two-thirds by 2020. Sinopec said it will have some 60 billion cubic meters (bcm) of gas capacity, which includes imports and also domestic production by 2023. In 2017, it produced only 27 bcm of gas.What jumps out at you?
After years of talking about China replacing coal with natural gas one would think that China was farther along in this endeavor than this. After all this, after all these years .... Per China’s government mandate to replace coal-based power generation with natural gas, the cleaner burning fuel is set to make up at least 10 percent of the country’s energy mix by 2020.
10%.
10%.
10%.
There's another story line here, but let this sink in for awhile.
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