China’s Natural Gas Demand Set to Triple by 2040
According to a new report from the U.S. Energy Information Administration, China’s demand for natural gas is set to triple over the next 25 years.
Natural gas demand in China is projected to hit 17.5 trillion cubic feet (tcf) in 2040, a greater than three-fold increase from the 5.2 tcf of demand in 2012. Yet, there is a big question mark over how the country will meet that need but the EIA says the vast majority of it will come from two sources: domestic production and liquefied natural gas (LNG) imports.
China is potentially sitting on 1,115 tcf of technically recoverable shale gas – the world’s largest reserves. However, China will have to confront a number of challenges such as lack of fresh water, infrastructure, dearth of pipelines, complex geology, and high costs which will have to overcome with experience and technical skill of experienced players.
Joint ventures with American companies will allow China to access some of the tools that fueled rapid growth in the U.S. – pressure pumps, horizontal drilling, multiple wells per pad, and water-efficient equipment, for example.
Pipeline imports will play an important, if lesser role, in meeting China’s natural gas demand. In fact, the pipeline connection made with Central Asia has been critical for China’s gas supplies. Originally commissioned in 2009, the China-Central Asian pipeline has been a vital source of natural gas to China.
The China-Central Asian pipeline has enhanced China’s leverage with Russia over its landmark natural gas deal. Once it’s completed in 2018, the Russian pipeline to China will have a capacity of 1.3 tcf per year.
Source: oilpricecom
