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China’s underground gas storage build has accelerated – what’s needed next?
*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
Underground gas storage facilities construction has accelerated in the past two years thanks to policy mandates, renewed concerns over energy security, NOCs’ commitment, further deregulation in gas pricing and wider seasonal price spread. Market-based mechanisms are being introduced to underground storage to improve its operations and returns. For storage service, PipeChina offered storage capacity to third parties via auctions on gas exchanges and disclosed the floor prices for storage services. For storage investment, partnerships and mixed ownerships of underground storage assets appear. Investment challenges still exist, including large up-front investment, poorer geological settings and uncertain returns. PetroChina, Sinopec and PipeChina drive underground storage investment. By 2035, underground storage capacity is expected to reach 89 bcm. Together with coastal LNG and inland CNG storage, the total capacity will reach 118 bcm, equivalent to 19% of projected annual gas demand
Table of contents
- Executive Summary
- Gas storage capacity build accelerated in the past two years
- Market-based mechanisms are being introduced to underground storage, but on a limited scale
- There are still challenges to underground storage investment
- The momentum of underground storage construction will continue, primarily driven by PetroChina
- Total storage capacity continues to grow, with underground storage playing a major role and inland LNG/CNG storage playing a marginal role
- What to watch for underground storage?
Tables and charts
This report includes the following images and tables:
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China’s gas storage capacity from 2015 to 2021Diverse underground storage ownerships: examplesEstimated prices for storage capacity users
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China underground storage landscapeUnderground storage capacity by status and companyPetroChina underground storage capacity by status and regionTotal storage capacity forecast
What's included
This report contains:
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