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China's Natural Gas

- Dec 21, 2017 -

A Glimpse into China's Natural Gas Supply and Demand through the "Gas Shortage"

Into December, the European countries began to suffer a "gas shortage" that is severer than ever before. Temperature in large part of Europe has fallen sharply since the beginning of the winter. This results in increasing demand for heating and further higher consumption of natural gas. On December 11th., small crack was found in the oil and gas pipeline Forties Pipeline System in southern Aberdeen. The pipeline operator INEOS announded the temporary closure of the pipeline for technical repair. The exace time needed for the repair is unknown. But according to official source, it will probably last for at least several weeks. Shortly after that, on December 12th., an explosion occurred in a gas pipeline system in Baumgarten, Austria, which is the largest one in Europe. Thus, delivery of gas from Russia to Europe via this pipe has to be delayed, leading to a gas shortage in Europe. All countries are actively looking for solutions to the problem of inadequate heating faced by their citizens. As the temperature drops, China also faces a severe situation of gas supply. Short supply of natural gas has affected many downstream industries, and many manufacturers have to reduce their production or even halt production. On December 12, BASF China declared force majeure on its MDI facilities in Chongqing and temporary closure. The closure was caused by a shortage of gas supplies from syngas suppliers, according to people familiar with the matter.

The main constituent of natural gas is alkanes, the majority of which are methane, ethane, propane and butane. Besides, there are hydrogen sulfide, carbon dioxide, nitrogen,water vapor, a small amount of carbon monoxide and a trace amount of rare gases such as helium and argon. Natural gas is a green fuel. An equivalent amount of natural gas can generate nearly the same amount of heat as manufactured gas and produces less carbon dioxide. Meanwhile, natural gas is an important chemical material, which can be used to produce carbon monoxide, synthetic ammonia, urea and methanol. Carbon monoxide and synthetic ammonia are used in polyurethane. Carbon monoxide can be used to produce phosgene, which is important raw material for producing MDI and TDI.

The world's proven recoverable gas reserves in 2016 reportedly stood at 186.6 trillion cubic meters. Wiith the continuous innovation in and advancement of prospection and exploitation technologies, recoverable gas reserves will continue to rise in the future. Currently, countries that lead in gas reserves around the world include Iran, Russia, Qatar, Turkmenistan and the United States.

China's natural gas production has maintained a relatively rapid growth, with production remaining over 130 billion cubic meters in the last three years. At the same time, the nationwide consumption has also maintained a high growth rate. In 2016, domestic consumption exceeded 200 billion cubic meters, reaching 210.3 billion cubic meters. 

At present, natural gases imported by China are mainly pipeline natural gas(PNG) AND liquefied natural gas(LNG). PNG is mainly imported from Turkmenistan, Uzbekistan,Kazakhstan and Myanmar. And LNG is mostly imported from Australia, Qatar and Malaysia.