China’s gas demand growth to slow down to 9%
Baku, Azerbaijan, Oct.8
By Leman Zeynalova – Trend:
China’s gas demand growth is expected to slow down to 9 percent in 2019, compared with 17 percent in 2018, said Gavin Thompson, Vice Chairman, Energy – Asia Pacific at Wood Mackenzie research and consulting company, Trend reports.
He pointed out that the global LNG market needs China; it’s that simple.
“With some 165 million tons per annum (Mtpa) of new supply expected to take final investment decision between 2018 and 2021 and $240 billion of investment required to bring this online, much attention is focused on how much China can consume,” noted the analyst.
Clearly, the pace of gas demand growth in China has slowed in 2019, said Thompson.
“With a slower economy, trade dispute uncertainties reducing investor confidence and industrial output, and the government’s pragmatic policy position on managing the pace of coal-to-gas switching, this was inevitable. We now expect annualised growth of 9 percent this year. Hardly a poor performance, but not matching the 17 percent increase seen in 2018,” he explained.
He went on to add that much of the growth over the past two years has been policy-led, and attention is now on how the government will continue to evolve its focus on areas such as fuel switching.
“Given slower economic growth, China’s leaders are trying to support industrial producers, and this has impacted gas demand in the sector. But I think we need to bear in mind that China’s coal-to-gas switching policies haven’t been dropped. The government remains firmly committed to reducing urban pollution (and is having success in this) while seeking to avoid the spike in LNG demand and the prices seen in early 2018,” the analyst added.
Thompson said Wood Mackenzie forecasts China’s gas production to rise 8 percent per year through 2025, requiring increased takeaway capacity and inter-connectivity.
“This year alone, domestic output will rise by almost 9 percent. This is inevitably impacting short-term LNG imports, which we see increasing by a more modest 7 million tons (Mt) to reach 61 Mt in 2019,” he added.
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