China gas 2021 outlook to 2050 Report

Commodity Market Report 30 July 2021

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Report summary

China's gas demand is expected to grow by 100% to 2050 in our base case. Most of the gas demand additions will materialise in the current decade. We expect the average growth rate to be 5.5% a year between 2020 and 2030, before slowing to 1.7% a year between 2030 and 2040. Gas demand will peak in the mid-2040s. In this report, we explore the key drivers of gas demand in China and supply sources required to meet that demand. Key topics include: Which sectors are driving gas demand? What is the potential of domestic supply? How do pipeline imports and LNG imports fit in the overall balance? What is the infrastructure development supporting demand creation? How are the industrial landscape and regulatory framework evolving?

Introduction
All sectors will see gas demand increase, but those with high seasonal profiles will contribute more to incremental volumes
Domestic production will remain the backbone in gas supply mix; long-term production potential hinges on unconventional sources
Import requirements open doors for global piped gas and LNG suppliers
Market players are adapting to gas sector reforms
Reaching carbon neutrality could alter gas projections, notably after 2030
Regulatory structure
- Key trends
- Upstream policies
- Midstream policies
- Downstream policies
- Pricing
Players overview
- Upstream suppliers
- Midstream pipeline operators
- Downstream distribution companies
Economic outlook
Gas demand overview
Industrial sector (including feedstock)
Residential, commercial and space heating
Transport sector
Power sector
Gas production overview
Domestic conventional supply
Unconventional supply: tight gas
Unconventional supply: CBM and CMM
Unconventional supply: synthetic natural gas (coal-to-gas)
Unconventional supply: shale gas
Gas imports – pipeline
- Central Asia
- Turkmenistan
- Uzbekistan
- Kazakhstan
- Myanmar
- Russia
- Russia East - Power of Siberia
- Russia Far East
- Russia West-Altai
- Power of Siberia II via Mongolia
Gas imports – LNG
- LNG corporate and contracting
Trunk pipelines
- Existing
- Under development and proposed
Domestic gas infrastructure – underground storage facilities
Gas import infrastructure – LNG
- China Oil & Gas Piping Network Corporation (PipeChina)
- CNOOC and its joint ventures
- CNPC-PetroChina
- Sinopec
- Non-NOCs
Gas import infrastructure – pipelines
Supply cost stack
Pricing of pipeline imports
City-gate prices
Pipeline tariffs
- Inter-provincial transmission pipeline tariffs
- Intra-provincial transmission and local distribution tariffs
Prices at end-user level
- Power
- Industrial and commercial
- Residential
- Transport
Value-added tax on natural gas
Appendix – end-user prices in provincial capital cities

Tables and charts

This report includes 41 images and tables including:

China gas demand by sector
China gas demand by province
China gas market balance

Supply changes vs H2 2020 outlook
China power market balance
Economic indicators
Total China gas demand by sector
Total China gas demand by province
Industrial fuel gas demand by provinces
Feedstock gas demand by top province
Residential and commercial gas demand
Winter space heating gas demand
Transport gas demand by provinces
Transport gas demand by vehicle types
Gas demand in power generation by region
Power generation mix
Domestic Gas Supply by Basin
Gas Supply Conventional and Unconventional
Domestic gas supply by basin (%)
Supply growth by region/basin
Ownership structure of PipeChina, as of July 2021
China underground gas storage facilities map
LNG Receiving Capacity by Status and by Company, as of July 2021 (mmtpa)
China supply cost by project – full life breakeven vs import contract price
China supply cost by basin – remaining breakeven plus tariff assumption to Shanghai
Assumed Turkmenistan contract price into Shanghai (2021 terms)
Assumed Russian contract price into Beijing (2021 terms)
Historical levels of Shanghai city-gate price ceiling or benchmark
Provincial city-gate prices benchmark, as of July 2021
Trans-Asia gas pipeline route map
Russia-China gas pipeline route map
LNG contracts signed by non-NOCs in 2020/21
Contracted LNG by import company
Contracted LNG by exporting country
China contracted LNG by project and buyer (SPAs and HOAs)
China supply and demand balance
Key domestic gas infrastructure - existing
China LNG terminals map
Tariff rate by individual pipeline company, effective as of April 2019
Tariffs for typical routes from supply sources to coastal China
End user prices and provincial city-gate price benchmark (as of July 2021)