Oil producer pins its hopes on natural gas

Company aims to make the clean fuel a future pillar industry, as nation seeks new energy sources

China's top offshore oil producer is eyeing liquefied natural gas as another pillar industry.

"Liquefied natural gas will become another important pillar industry for the company, as new energy is playing an increasingly significant part in the national and global energy industry," says Jin Xiaojian, general manager of strategy and planning at state-owned China National Offshore Oil Corp.

According to Jin, gas production accounts for 18 percent of the company's total, with oil accounting for the remaining 82 percent. However, the proportion of gas will see gradual growth to around 20 percent in the near future, as large producers worldwide are ramping up production," Jin says.

"The company has become the nation's biggest LNG trader and the world's third-largest. It has brought liquefied natural gas from about 20 countries worldwide, The oil company says its natural gas business currently covers 78 cities nationwide, with LNG sales reaching 12.66 billion cubic meters in the first half of 2016, a year-on-year increase of 11.7 percent.

Its LNG imports soared to 7.7 million metric tons, an increase of 24.4 percent year-on-year.

The LNG imported by the oil giant accounts for 69 percent of the country's total, it said.

Long used in the power industry for residential heating, natural gas is a clean form of energy extracted from the ground and shipped through pipelines. Energy companies worldwide have started shipping the cheaper and greener form of energy between countries in recent decades.

Current demand is coming mainly from industrialized Asia, with Japan and South Korea accounting for more than half of global demand.

China's interest in natural gas is increasing because of efforts by the authorities to move its energy supply away from an overwhelming reliance on coal.

As the world's largest energy consumer, China seeks to raise the share of less-polluting natural gas to 10 percent of its energy mix by 2020, from 6 percent last year.

The country's gas consumption in 2015 expanded by 3.7 percent to 191 billion cubic meters, according to an annual report from China National Petroleum Corp's Research Institute of Economics and Technology, while gas demand growth this year might accelerate to about 6 percent.

To further boost the use of liquefied natural gas from an overwhelming reliance on coal, Jin says, the government should encourage gas operators to further share their pipelines and network, while making gas prices market-oriented.

zhengxin@chinadaily.com.cn

(China Daily Africa Weekly 11/18/2016 page27)