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China is looking to increase its production of natural gas, especially shale gas, to reduce its import dependence, while demand continues to grow in the foreseeable future, says a government research report published by Reuters.
An increase in conventional and unconventional natural gas production would be crucial for China to meet growing demand while trying to reduce the share of gas imports at the same time, according to the report prepared by the oil and gas department of the National Energy Administration (NEA) and a research arm of the State Council of China.
According to government estimates, natural gas consumption in China is expected to increase by 10 percent this year to 310 billion cubic meters. This year's growth would be lower than 17.5 percent last year's consumption, but Chinese demand is expected to continue to grow until 2050, according to the report quoted by Reuters.
The trade war with the United States has probably slowed China's demand for natural gas this year, the report says. Due to the trade war, China also applies a tariff on imports of liquefied natural gas (LNG) and, because of this tariff and trade, Beijing does not buy as much US LNG as before .
Nevertheless, China is expected to continue importing growing volumes of LNG and could become the world's largest buyer of LNG by 2022, ahead of the current leader in Japan, Wood Mackenzie, in a recent report.
Related: OPEC abandons its strategy, stimulates production
But in order to reduce import dependence, China is betting on increasing domestic production, especially in southwestern Sichuan province, in the northern Erdos basin and off the coast.
China is expected to double its natural gas production by 2040, but difficulties in developing shale gas resources have led to a decline in production prospects and increased long-term imports. Wood Mackenzie last week.
According to Wood Mackenzie consultant Xueke Wang, natural gas supply in the Chinese domestic market is expected to double to 325 billion m3 by 2040 in 2040. However, this latest forecast for 2040 is 39 billion cubic meters lower than previous forecasts. WoodMac, mainly due to lower forecasts of shale gas and CBM production, said Wood Mackenzie in a recent study.
By Tsvetana Paraskova for Oilprice.com
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