New | High prices threaten Beijing's target of natural gas accounting for 10pc of energy use
Liberalisation seen as key to Beijing's goal of cleaner natural gas topping 10pc of mainland energy use by end of the decade
The central government risks missing its target for natural gas to account for more than 10 per cent of mainland energy consumption by the end of the decade if prices for the cleaner-burning fuel are not cut fast enough, according to a gas market researcher.
Prices kept above those in international markets have led to an oversupply of gas in the domestic market, with the state-backed energy producers raising their output while being stuck with long-term contractual commitments to import gas via pipelines and ocean-going vessels, said Shan Weiguo, who warned of a worsening glut if Beijing did not act soon to ease price controls.
Shan is head of gas market research at the economics and technology research institute of China National Petroleum Corp (CNPC), parent of listed PetroChina, the nation's largest gas producer and importer.
"The third potential consequence is a widening of demand gap between peak and off-peak seasons, which implies more storage capacity needs to be build to meet peak demand," he told the Pacific Energy Summit at the end of last month. According to CNPC, the mainland's gas consumption growth has slowed to 2.3 per cent year on year in April, compared with 6.9 per cent in the year's first four months.
It is also much weaker than the 9.8 per cent last year, and an average of 16 per cent over the past 15 years, Shan noted.
CNPC in January had forecast this year's gas demand on the mainland to rise 9.3 per cent.