NEA: China Energy Prospect 2018

On February 26, 2018, China’s National Energy Administration (NEA) published its guidance on China’s energy industry for 2018. In the document, NEA showed the clear prospect of China’s energy industry in 2018. The guidance is not enforceable, but still it reflects the request and focus of the government.

As for China’s energy consumption, the total volume will be around 4.55 billion tons of standard coal equivalent (TCE). Herein, the non-fossil energy proportion in the energy structure shall increase to 14.3%, and that of the natural gas shall increase to 7.5%, while that of the coal shall reduce to 59%. As reference, the proportion of natural gas in the energy structure was 6% in 2015, 6.4% in 2016 and 7% in 2017.

As for China’s energy supply, the energy production will be around 3.66 TCE. Herein, the coal production will be 3.7 billion tons, the crude oil production will be 0.19 billion tons, and the natural gas production will be 160 bcm.

Regarding the coal-to-gas progress and the supply shortage in 2017 winter, NEA gave a principle to name the target of the reform on the basis of the supply and infrastructure, so as to avoid the supply deficit in the winter peak season.

Besides, NEA stressed the off-grid gas supply mechanism and the natural gas peak-shaving reserve capacity, and NEA urged governments at all levels and the state-owned gas companies to promote the natural gas infrastructure construction in2018.

As for the pipelines, NEA requested to enhance the backhauling capacity from South China, and increase the conjunction of the pipeline systems belonging to different operators. To promote the construction of CNPC’s Myanmar-China Trunk Line, Sinopec’s Beihai Terminal Regasification Line, CNOOC’s Ningbo Terminal Regasification Line and the conjunction to Zhejiang Provincial Grid, CNOOC’s Dapeng Terminal Regasification Line and the conjunction to CNOOC’s Guangdong Provincial Grid, etc. To accelerate the construction of the north section of Russia-China East Trunk Line, the E-An-Cang Line, the south section of Xinjiang CTG Line, the middle and east sections of the West-East Trunk Line III. To start the construction of the Mengxi CTG Line, the middle and south sections of Russia-China East Trunk Line, the Sichuan-East Trunk Line II, the Qingdao-Nanjing Line, CNPC’s Caofeidian and Rudong Terminals’ Regasification Lines, CNOOC’s Dapeng Terminal Regasification Line, etc.

As for the terminals, to accelerate the construction of LNG terminals in Shenzhen, Zhoushan, Wenzhou, Yancheng and Zhangzhou, as well as the expansion of LNG terminals in Shanghai, Rudong, Qingdao, Tianjin, Ningbo, Zhuhai and Yangpu.

As for the underground reserves, to accelerate the construction of the Wen-23 and Ke-75 reserves and meet the input requirement by the end of 2018.