Photo: Beijing Gas Group chairperson Li Yalan
SHANGHAI, Apr. 2 (Xinhua) -- The 19th International Conference & Exhibition on Liquefied Natural Gas (LNG2019) opened in Shanghai on April 2. Li Yalan, chairperson of Beijing Gas Group and speaker of a LNG2019 plenary forum on New LNG Markets said in an exclusive interview with Xinhua that urban coal to gas switch will become the major driver for China's natural gas consumption and there is huge potential for gas use in Chinese large cities given their relatively low gasification rate.
-- Urban gas consumption to rise further
According to Li, Beijing's natural gas consumption reached 18.8 billion cubic meters in 2018, accounting for 35 percent in its energy consumption mix. However, for the cities with higher gross energy consumption such as Shanghai and Tianjin, their natural gas consumption just came to 9.1 billion cubic meters and 9.3 billion cubic meters, respectively, in the same year.
"Clean energy use is an important symbol for modernized development of a city. In the future, natural gas will replace a large quantity of coal consumption in urban industries, power plants, and heating systems," said Li. For the new energy demand in cities, it can be directly met by natural gas or other clean energy; for the existing coal consumption, it should be gradually replaced by natural gas according to regional demand and economic conditions, she added.
Beijing Gas Group, the main player in promoting natural gas use in Beijing, has gradually expanded coal-free areas in the city over the past more than 20 years. Beijing's natural gas consumption increased from 180 million cubic meters in 1997 to 18.8 billion cubic meters in 2018. "Beijing plans to raise its annual natural gas consumption to 23 billion to 26 billion cubic meters, accounting for over 40 percent in its energy mix, with the new demand mainly from coal-fired plants' coal to gas switch, new building as well as high-tech industries," Li said.
"Beijing municipal government's consistent policies for clean energy use and the city's integrated town gas market are also important guarantees for rapid development of natural gas in Beijing," noted Li.
According to Li's forecast, China's natural gas consumption in 2020 will reach the upper target of about 360 billion cubic meters set in the 13th Five-Year Development Plan for the Energy Industry (2016-2020), accounting for 10 percent of the total energy consumption.
-- Rising ability in securing gas supply
"As China's natural gas infrastructure is improving and management on both supply and demand sides is strengthening, the country will constantly enhance its ability in securing natural gas supply and the severe supply shortage is unlikely to happen again," said Li.
China has rich natural gas resources but high difficulties remain in exploration given moderate abundance ratio and deep location of the resources. As China's prospecting technology is advancing and the investment in the field is increasing, domestic natural gas output will rise steadily to further guarantee home supply, Li said.
Meanwhile, the sources of China's natural gas imports, especially LNG imports are being diversified, which is favorable for supply security. Li believed that global natural gas market has loose supply and China is able to guarantee its natural gas supply as long as its construction of natural gas infrastructure such as storage facilities, pipelines and etc. can catch up with the pace of domestic consumption.
Li revealed that Beijing Gas Group plans to invest a total of 20 billion yuan in 10 LNG storage tanks in Tianjin as part of its efforts to reach the 5 percent gas storage target set for town gas enterprises.
-- Global market change favorable for LNG trade flexibility
According to Li, global LNG market is now undergoing changes and presents the following main features.
Firstly, both buyers and sellers are increasing. In terms of the demand side, besides the traditional LNG importers such as Japan and South Korea, the emerging economies such as China and India have become new major LNG buyers. In the meantime, many other Asian countries are considering clean energy use and natural gas imports. From the supply side, the non-traditional LNG exporters such as Papua New Guinea, Russia, Canada, US and Mozambique are turning into emerging LNG exporters.
Secondly, many international well-known oil and gas enterprises, which have great strength in capital and technology, are beefing up efforts in natural gas exploration and development, which not only increases natural gas supply in the international market but also promotes economic development in the less developed resource-oriented countries.
Thirdly, the number of research and consultancy institutions on the natural gas market is on a rise. They will play an active role in promoting market trading and also reflects that the natural gas industry is booming.
In addition, as global LNG trade is increasing, LNG trade will become more flexible. "We hope that the LNG contract will be more flexible in the destination term and the contract period, and regular review mechanism should be introduced in to better meet market demand," said Li.
When talking about LNG2019, she hoped that the conference will promote LNG industry transformation as well as active adjustment of the relationship between buyers and sellers of the natural gas market.
"China became the global largest natural gas importer in 2018 and is expected to be the biggest LNG importer in the world in 2020. It will be a fruitful LNG conference in China," said Li.
This triennial event was first held in 1968. This year marks the first time the conference to be held in China, the world's fastest growing LNG market. LNG2019 is presented by the International Gas Union (IGU), Gas Technology Institute (GTI) and the International Institute of Refrigeration (IIR).
The Shanghai conference, the largest LNG event ever held in China, is hosted by China LNG Association, China Gas Society, Chinese Association of Refrigeration and China Gas Association. Over 170 enterprises and 1,800 representatives from 53 countries and regions are estimated to attend the conference. The conference will last to April 5. (Contributed by Liu Xiaoyun, Jiang Yujuan)
A single purchase
