China gas and power month in brief: high gas demand, but no supply crunch so far Report

Insight 11 January 2019

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Report summary

China can breathe a sigh of relief. Accelerated domestic production and improved Central Asian pipeline imports put an end to concerns about tight gas supply becoming a reality this winter. Shale gas is not so doing well – it fell short of its 2018 production target. LNG remains hot and we saw yet another new monthly import record set in November. China has likely imported more in December, but the share of US LNG remains negligible. 2018 was also a strong year for power demand. In addition to an outperforming industrial sector, we saw the electricity substitution initiative become a growth engine. In the first three quarters, China’s fuel-switching programme contributed to one-third of total incremental power demand. Strong demand growth and the rebalancing of the Chinese economy towards the service sector have led to energy decoupling, where GDP growth is less sensitive to changes in power demand growth.

Executive summary
Markets
- Stable pipeline supply improves winter gas balance
- Shale gas falls short of 2018 production target
- Strong demand growth and economic rebalancing support energy decoupling
Policy
- Clean energy consumption action plan aspires to reduce renewable curtailment
- US LNG into China remains limited after trade talks shift towards de-escalation
Smog watch
- Air quality improves in 2018 and Beijing implements diesel standards policy

Tables and charts

This report includes the following images and tables:

Monthly gas demand
Monthly LNG imports
Beijing AQI
Monthly power demand
National renewable curtailment rates: targets vs actual value

What's included

This report contains:

China gas and power month in brief: high gas demand, but no supply crunch so far

PDF 2.28 MB
Dashboard_December 2018.xlsx

XLSX 109.65 KB
Infrastructure tracker_December 2018.xlsx

XLSX 331.61 KB
Prices tracker_December 2018.xlsx

XLSX 258.63 KB