Reforms on opening up the Chinese market play a prominent role in the country’s natural gas industry in 2015, which is the final year for the country’s 12th Five-year Plan (2011-2015). The Chinese government continues to push forward reforms by:
On the upstream front, the country launched bidding on exploration rights for six oil and gas blocks in Xinjiang, with the option of separating gas transportation via pipeline and sales on the table on the midstream side and pilot opening up of prices for direct bulk gas supplies in the downstream sector.
Reforms along the whole industry chain of natural gas not only lay a foundation for the country’s efforts to liberalise its gas market but also generate new investment opportunities for private and foreign companies.
For the market of non-conventional natural gas, the interest of new investments has cooled down under the impact of reduced city-gate ceiling prices. Some foreign companies such as ConocoPhillips have withdrawn from the Chinese shale gas market. Only PetroChina and Sinopec are striving for more breakthroughs in shale gas development, while other enterprises hold a strong wait-and-see stance. The development of other non-conventional gas resources, such as coalbed methane and coal-based synthetic natural gas (SNG) is slow as a result of high financial input and stricter government approval on such projects under mounting pressure of environmental protection.
China’s apparent consumption growth of natural gas continued to slow down in 2015 as a result of declining economic benefits of clean energy due to higher costs and the country’s economic downturn. The country’s apparent gas consumption is estimated at 187.2 billion cubic metres in 2015, a rise of only 3.7% year on year. China’s domestic gas production is now determined by sales, switching from an output-based sales pattern.
For liquefied natural gas (LNG), China has seen prominent oversupply in the domestic market. Domestic LNG producers suffered from deepened negative margins, while margins of selling imported cargos were lucrative along with significantly decreased import costs. Widened negative margins at domestic LNG plants have resulted in lower premiums of such units in the merger and acquisition (M&A) market and thus spurred enterprise enthusiasm in low-cost acquisition. Many enterprises having other business focuses started to tap into the LNG market.
As one of the clean energy sources, natural gas use will still gain strong support from the Chinese government during the 13th five-year plan period (2016-2020).
What does it mean for international market players?
In order to help you through your investment planning and business strategies, ICIS has updated its China natural gas annual report to give you a holistic view of the Chinese natural gas market. An essential resource for international sellers, the annual report covers all of the following:
ICIS is the world's largest petrochemical market information provider and has fast-growing energy and fertilizer divisions. Our aim is to give companies in global commodities markets a competitive advantage by delivering trusted pricing data, high-value news, analysis and independent consulting, enabling our customers to make better-informed trading and planning decisions. We have more than 30 years' experience in providing pricing information, news, analysis and consulting to buyers, sellers and analysts.
With a global staff of more than 800, ICIS has employees based in Houston, Washington, New York, London, Montpellier, Dusseldorf, Karlsruhe, Milan, Mumbai, Singapore, Guangzhou, Beijing, Shanghai, Yantai, Tokyo and Perth. Some 350 of ICIS’s staff are journalists engaged in reporting market prices and news, and ICIS is fully committed to upholding the highest journalistic principles of verification, corroboration and authentication. ICIS has a compliance framework that along with its methodologies and business processes adheres to the requirements of the IOSCO PRA Principles.
ICIS is a division of Reed Business Information, part of RELX Group plc.
About Reed Business Information
Reed Business Information provides information and online data services to business professionals worldwide. Customers have access to our high-value industry data, analytics, information and tools. Our strong global brands hold market-leading positions across a wide range of industry sectors including banking, petrochemicals and aviation where we help customers make key strategic decisions every day. RBI is part of RELX Group plc, a world-leading provider of information solutions for professional customers across industries.
About RELX Group:
RELX Group is a world‐leading provider of information solutions for professional customers across industries. The group employs about 28,500 people of whom half are in North America. RELX PLC, the London Stock Exchange listed shareholding vehicle, holds 52.9% of the shares in RELX Group. RELX NV, the Amsterdam Stock Exchange listed shareholding vehicle, holds 47.1% of the shares in RELX Group. The shares are traded on the London, Amsterdam and New York Stock Exchanges using the following ticker symbols: London: REL; Amsterdam: REN; New York: RELX and RENX. The total market capitalisation is approximately €28.6bn/£21bn.
An in depth-review of China’s natural gas markets in 2015 with a detailed supply/demand outlook up to 2020, the newly updated annual study addresses all of the following questions:
Our weekly and monthly reports provide extensive information on China’s natural gas, LNG and non-conventional gas spot markets. The coverage of the reports include China’s domestic and import/export prices, local LNG plants’ schedules and operating rates, government policy updates, and supply-demand activities. Supported by analysis of key issues and price drivers, the reports are designed to help you keep up with developments in China, understand their impact on your business and have a reliable price benchmark when negotiating gas contracts.Request a free sample report
This detailed report provides expert insights into the LNG demand outlook, broken down by province, in the context of domestic policies, infrastructure developments and other factors shaping investment opportunities in China. A valuable tool for industry participants seeking to take advantage of China’s LNG market liberalisation.Enquire about the report
ICIS delivers independent and highly regarded coverage for global LNG markets, ensuring you are able to strengthen your position in price negotiations and optimise profitability. Our daily and weekly reports include: