(EnergyAsia, June 25 2012, Monday) — China’s natural gas consumption will rise from 130.7 billion cubic metres last year to 200 bcm by 2020 and 550 bcm by 2030, said the president of China National Petroleum Corp (CNPC).

Since 2000, it has risen by 5.3 times to make China the world’s fourth largest natural gas consumer behind the US, Russia and Iran, said Zhou Jiping at a recent international gas conference in Kuala Lumpur in Malaysia.

CNPC, which accounts for 75% of China’s natural gas production, is projecting domestic consumption to rise by 8% a year between 2011 and 2030.

Mr Zhou said the share of natural gas in China’s primary energy mix will rise to 10% by 2020 from 5% in 2011 and 2.4% in 2000.

“With proper incentives, our gas demands are going to grow by about 8% annually, which is to increase our consumption to 350 bcm and 550 bcm in 2020 and 2030 respectively, accounting for 10% to 12% of China’s primary energy consumption,” he said.

To ensure natural gas’s expanded role, CNPC is investing heavily in the country’s pipeline system and infrastructure.

By the end of 2011, China had completed over 50,000 km of gas trunk pipelines to boost its transmission capacity to over 160 bcm per year, said Mr Zhou.

Through its five liquefied natural gas (LNG) receiving terminals with a total annual capacity of 15.8 million tons, China imported 31.4 bcm natural gas last year to account for 24% of its domestic consumption.

Mr Zhou predicts China’s domestic gas production will reach 120 bcm in 2015 and 160 bcm in 2020 after rising 3.9-fold to102.5 bcm between 2000 and last year. It will climb to 200 bcm by 2020 and 300 bcm by 2030.

According to the latest resources assessment by the Ministry of Land and Resources, China has 32 trillion cubic metres of technically recoverable conventional gas reserves. The country’s rate of proven resources stood at just 16%, indicating a high potential for reserves and production growth.

Mr Zhou touted China’s potentially vast holding of shale gas resources of about 25 tcm including 10.9 tcm of coalbed methane gas reserves.

“Our CBM is still in the development stage of industrialisation and we have built a production capacity of nearly 10 bcm. For China’s shale gas, the technically recoverable resources are 25.1 tcm according to our initial estimate. We are now conducting the development pilot tests.

“By integrating technologies and expertise of foreign companies with our own research results, CNPC drilled a horizontal well in the marine facies shale gas reservoir in southwestern Sichuan Basin, and we obtained an initial daily output of 200,000 cbm at a stable wellhead pressure of 20MPa.

“For the next 20 years, China’s gas production is going to remain in the peak period of growth. Our country’s gas production capacity is expected to surpass 200 bcm and 300 bcm in 2020 and 2030 respectively.

“In addition, such remote areas with rich coal resources as Xinjiang and Inner Mongolia Autonomous Regions have been formulating coal-to-gas (CTG) development plans, and they have started to build demonstration projects.

“CTG has the cost advantage compared with imported gas, so it has a quite good future as well. China’s domestic gas output will be able to meet the bulk of our demand growth, and it will be the main body to satisfy our needs over the coming decades.”

According to the International Energy Agency (IEA), global gas demand will rise 17% to 3,937 bcm in 2017, with China more than doubling its consumption to 273 billion cbm.