• Sat
  • Dec 20, 2014
  • Updated: 2:09am

Energy sector requires huge boost

PUBLISHED : Wednesday, 05 April, 1995, 12:00am
UPDATED : Wednesday, 05 April, 1995, 12:00am
 

CHINA will need to invest US$ 1 trillion in its energy markets over the next 20 years to maintain its projected demand growth rates, according to consultants DRI/McGraw-Hill.


Because of 'a severe electricity deficit in most areas of China, which will be compounded by the fact that economic growth and improved living standards will favour wider use of electricity in the future', the electricity sector is set to receive $550 billion of investment.


The consultancy said foreign equipment suppliers and power companies in particular were likely to be 'heavily involved' in investment in the electricity sector, where China would need to add more than 600,000 megawatts of new capacity by 2015.


Coal investment would need to be about $180 billion, though foreign companies had yet to be invited to take a major role.


However, the projected $80 billion that would be spent on oil refining and distribution should provide rich pickings for foreign companies.


Oil refining imbalances in China, which has some of the annual capacity of 3.3 billion barrels per day (bpd) produced in areas of weak demand, would have to be corrected and increased to 10.2 billion bpd in 20 years, the consultancy said.


Exploration and production of oil should receive $100 billion by 2015, while natural gas investment would be $90 billion.


'Foreign capital could account for about 20 per cent of the total investment required, but would be more strongly represented in oil and gas exploration and production, oil refining and power generation, than in coal production and transport,' it said.


Overall primary energy demand was set to more than double by 2015, with an annual growth rate of almost 4.5 per cent.


However, the consultancy cautioned that this forecast assumed the continuation of economic reform, decentralisation and energy price liberalisation.


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