New | Sinopec looks to natural gas as oil prices fall
Energy giant plans to lift output at its mainland sites to almost double in the next five years while cutting back on crude production
China Petroleum & Chemical (Sinopec), the nation’s second-largest oil and gas producer and the world’s second-biggest oil refiner, aims to almost double its natural gas output in the five years to 2020 while cutting oil production amid low prices.
The company, which needs a crude oil price of at least US$60 a barrel for its oil production operation to break even, has made major natural gas discoveries in the past decade that allowed it to raise gas production substantially. The trend is set to continue.
It has set a target to raise gas output to 40 billion cubic metres (bcm) in 2020 from 20.8 bcm last year. Adding imported gas, it aims to supply a total of 53 bcm in 2020.
“Our proven gas reserves and development work are sufficient to meet our target,” chairman Wang Yupu told reporters Wednesday. “We have made significant new discoveries in the Sichuan and Ordos [gas] basins.”
The 40 bcm target consists of 29.5 bcm of gas extractable by conventional methods, as well as 10 bcm of gas in shale rock formations and 0.5 bcm in coal seams. Both of these require advanced “unconventional” technology.