Tianjin LNG terminal under Sinopec Photo: cnsphoto

China is gearing up to secure adequate supplies of natural gas and coal to meet rising market demands during the coming winter season.

While global energy supply crunch is exacerbating and fuel markets are becoming more volatile, China, as a major energy consumer, has managed to stabilize prices and expand reserves by increasing domestic production and diversifying imports - important moves to  to secure economic stability as well as production in the world's largest manufacturing hub.

In response to government calls to secure energy supplies, domestic energy companies are stepping up land and sea exploration and development of oil and gas.

China's largest offshore oil and gas producer, China National Offshore Oil Corp, said that its main oil and gas producing areas have overcome difficulties, trying to ensure stable supply of natural gas. The comment came in a company statement on Tuesday, domestic media outlet the paper.cn reported on Wednesday.

It said that about 10 billion cubic meters (bcm) of domestic gas will be supplied during the coming winter and spring next year.

PetroChina's Changqing oil and gas field, China's largest natural gas production base, where annual output accounts for about a quarter of the country's total, added a net increase of 10 million cubic meters of natural gas per day.

Due to the ongoing Russia-Ukraine conflict and the leaks and explosions of the Nord Stream gas pipeline, global natural gas prices have soared. Many European countries are scrambling to add winter fuel reserves.

Experts predicted that despite global energy price hikes, China's consumption will stay basically the same as last year.

"The unprecedented international oil and gas prices have affected the Chinese market, but only a little, thanks to government policies to stabilize prices and supplies," Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University, told the Global Times on Wednesday.

China's effort to expand domestic gas production, which accounts for the major part of market supplies, is an important measure to secure steady supplies and cap prices.

From January to August, China produced 143.7 bcm of natural gas, a year-on-year increase of 5.5 percent, figures from the National Bureau of Statistics showed.

The China Natural Gas Development Report (2022) predicted that the country's natural gas output will rise to 220 bcm this year, about 10 bcm more than last year.

Domestic natural gas accounts for about 55 percent of market demands, and this source has risen year after year as a way to satisfy growing demand, Lin said, adding that China's natural gas resources are mostly adequate.

"But the 45 percent portion of imports isn't expected to shrink, as domestic production alone is far from enough to meet market demand," the expert said.

Since natural gas consumption only accounts for about 9 percent of China's energy use, other sources such as coal still play a major part in securing China's energy security, according to Lin.

China is expanding output and diversifying imports from neighboring countries such as Mongolia.

In the first eight months, China's coal output increased 2.93 billion tons, a rise of 11 percent year-on-year.

China's coal reserves stand at 143.197 billion tons, ranking No.4 in the world, after the US, Russia and Australia.

Global Times