China’s gas supply falls short on rising demand

13 May 2013 08:36  [Source: ICIS news]

SINGAPORE (ICIS)--China’s gas supply has been short in northern regions such as Hebei and Shandong provinces since the beginning of May as a result of rising downstream demand from the industrial and vehicle sectors, according to a northwest China-based supplier of liquefied natural gas (LNG).

The country has accelerated the progress of oil/coal-to-gas conversion via industrial boilers in the past few years, and the consumption of gas as vehicle fuel is also rising, the supplier explained.

Gas demand in the first quarter of 2013 in some northern Chinese cities gained by about 20% over the same period in 2012, a gas company source based in north China said.

China’s apparent gas consumption reached 40.9bn cbm in the first quarter, an increase of 12.1% year on year, according to data from the National Bureau of Statistics (NBS).

Gas supply shortage also resulted in declined LNG production and tightened LNG supply, the LNG supplier based in northwest China said.

Many LNG producers in northern regions have shut their liquefaction units, which is probably due to a lack of natural gas supply, the supplier added.

LNG supply have fallen short in some regions, and prices are expected to rise, the supplier said.

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