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Weak gas demand forcing a shift in Chinese NOC supply strategy

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10 April 2015

Weak gas demand forcing a shift in Chinese NOC supply strategy

Report summary

Facing a dramatic slowdown in Chinese gas demand and a supply glut, China’s NOCs are using three levers to optimise supply and minimise losses. Firstly, restricting domestic capex in more expensive projects. Second, PetroChina will hold pipeline imports down to Take or Pay levels. Finally, all three NOCs will seek to maximise contracted LNG volumes into the domestic market, particularly as delivered prices look competitive against City Gate tariffs.

Table of contents

    • Adjusting the supply mix into coastal China
    • Examining the options - LNG and Central Asian imports
      • LNG
      • Central Asia
    • Assessing the impact on domestic upstream investment and production
    • Conclusion

Tables and charts

This report includes 8 images and tables including:

  • China's key pipeline and LNG regasification infrastructure
  • Chart 1: Wood Mackenzie H2 2014 Supply Outlook vs H1 2015 Demand Outlook (2014-2019)
  • Chart 7: Wellhead prices vs Brent (2014-2019)
  • Chart 8: Gas production by company (2014-2019)
  • Chart 2: Contracted LNG & Monthly LNG demand
  • Chart 3: China LNG prices vs Shanghai city gate price
  • Chart 5: Central Asia imports - H2 2014 vs H1 2015
  • Chart 6: Central Asia delivered gas prices vs LNG

What's included

This report contains:

  • Document

    Weak gas demand forcing a shift in Chinese NOC supply strategy

    PDF 605.13 KB

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