China`s natural gas demand expected to drop
Source: www.chinamining.org Citation: Reuters Date: September 16, 2014
China`s gas demand growth is expected to ease to its slowest in three years in 2014 and dip again next year, as a slowing economy and an ill-timed hike in prices keep gas demand at levels well below bullish forecasts.
The slowdown indicates demand will struggle to meet levels forecast by the International Energy Agency (IEA), which said in June that China is entering a golden age of gas, and could make life hard for new gas projects hoping for spot sales to China.
PetroChina, one of the country`s two top gas importers, has cut shipments of spot liquefied natural gas (LNG), an industry source said, and sees demand growth under pressure for at least three years.
China accounted for half of the world`s additional gas usage last year and the scaling back of spot LNG purchases comes as at least four Australian LNG projects are due to start operations in 2014 and 2015.
"If we don`t need to import, we won`t. As long as our LNG terminals have enough feedstock, we won`t need much spot supply," said a source with direct knowledge of PetroChina`s gas operations.
The IEA expects China`s gas consumption to rise 90 percent within the next five years to reach 315 billion cubic metres (bcm) by 2019, offsetting slower growth in Europe and elsewhere. That would imply an annual growth rate of 17.5 percent.
However, China`s top oil and natural gas producer, China National Petroleum Corp, sees apparent natural gas consumption climbing just 9.5 percent, down 4.7 percentage points from 2013.
PetroChina`s spokesman Mao Zefeng declined to make comments on the company`s spot LNG business but he said at a conference last week that China`s gas consumption growth would ease further in 2015.
"In the short term, the gas price reform and slowing economy will affect demand ... but we believe demand growth will be restored three to five years later," Mao said.
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