China's natural gas consumption is this year expected to be between 6.5% and 7.7% higher than last year's, potentially reaching 425 billion cubic meters, Xinhua reported, citing data from the National Energy Administration.
Domestic production could supply around half of that, as it is seen reaching 246 billion cubic meters, up 10 billion cubic meters on 2023, the regulator also said.
Last year, China consumed 394.5 billion cubic meters of natural gas, which was 7.6% higher than 2022 consumption. Domestic production hit 230 billion cubic meters last year, which was a record, set to be broken this year.
Production continued to grow strongly this year as well. Over the first half, it increased by 6% as state companies are boosting domestic output with new field start-ups. Total production stood at 123.6 billion cubic meters in January to June. In June alone, China's natural gas production jumped by 9.6% compared to the same month of 2023, according to the official statistics data.
At the same time, imports went up as well, as the country's total consumption rose. Over the first half of the year, imports, including pipeline and LNG, added 14.3% to 64.65 million tons, not least because gas prices declined, making the commodity more affordable for Chinese buyers.
The Asian benchmark LNG prices averaged a little over $9 per million British thermal units in the first quarter of 2024, compared to an average LNG price for delivery into north Asia of $18 per MMBtu in the first quarter of last year, per Bloomberg estimates.
China has been working hard to boost its domestic production of energy commodities to reduce its reliance on imports. Earlier this month, the government in Beijing set up a new umbrella company to that end, including oil giants CNPC and Sinopec as well as companies from other industries, such as China Aerospace Science and Industry Corp and steelmaker Baowu, as well as equipment manufacturer Sinomach and Dongfang Electric Group, a maker of power generators.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More