Beijing Adds 3 Million Households To Overstretched Gas Network

China’s natural gas demand could grow by 4.5 billion cubic meters next year as Beijing added another three million households to gas heating, Reuters has calculated. The number is higher than last year’s additions, which caused shortages in northern China due to insufficient supply of the commodity during the winter months.

The 4.5 billion cubic meters figure, Reuters notes, would cover the period between November 15 and March 15, but the agency also cites analysts as saying this increase in demand may not lead to an increase in overall consumption in the country: the gas needed to heat the additional three million households could be taken from industrial users, said one analyst, Chen Zhu, managing director of SIA Energy.

Last December, Beijing ordered several million households plus a number of industrial businesses to switch from coal to gas for heating and electricity in an attempt to reduce pollution.

As a result, gas imports into China reached an all-time high in that month as the country fought a very seasonal cold spell amid its efforts to reduce its dependence on coal and replace it with gas. At 7.89 million tons—including pipeline flows and LNG shipments—the December figure beat the previous record, booked in November, by 20 percent.

Beijing is on a quest to reduce pollution across the country but the rush to speed it up last year backfired with the shortage. This year, Beijing and local governments began preparing early on, with the authorities asking industrial producers in the north, which has some of the highest pollution rates in China, to curb their activity ahead of winter to reduce the amount of particulate matter in the air if they haven’t already reduced their emissions by other means.

Local energy companies have been stocking up on LNG supplies, underground storage facilities for natural gas have been filling, and help has come in the form of a milder than usual weather in November. Yet, according to the analysts cited by Reuters, even this will not be enough to heat the additional three million households without reducing consumption by industrial gas users.

By Irina Slav for Oilprice.com

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