Expanded natural gas storage will curb price fluctuations

China has issued a guideline on stepping up construction of natural gas storage infrastructure to improve the gas storage capacity in the country.

The move aims to strengthen overall planning and improve the industrial standard of natural gas storage construction through planning layout, operation models, mechanism and policy support, according to the guideline jointly issued by the National Development and Reform Commission and four ministries.

Overall planning will prevent random gas storage facility construction by local governments, and an independent operation model will attract more market entities and enable companies to profit based on marketization, it said.

It will also provide land, financial, tax and investment supporting policies to encourage more companies to invest.

According to the commission, natural gas prices in the country rapidly fluctuate, as China lacks gas storage facilities. While consumers might see a price rise at the beginning, they will also be free from losses caused by the insufficient gas supply with sufficient storage construction, as companies can store more gas during the off-season to ensure energy supply during peak consumption periods.

The commission said the impact on gas consumers should stay within a reasonable range and it would enforce guidance to ensure a stable gas price.