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China to boost natural gas production and trim imports, despite glut and pandemic-induced price slump, top distributor says
- ENN Energy sees excess natural gas supply persisting through 2022 as more production and processing capacity comes onstream
- Company will take advantage of low overseas gas prices to cut procurement cost and boost sales, president Zhang Yuying says
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The global natural gas market will remain oversupplied for the next two years but low prices will not hinder China from stepping up domestic output and reducing its reliance on imports, according to a senior executive of one of China’s largest natural gas distributors.
“This year, the coronavirus pandemic has rendered the global gas market in clear oversupply” situation, Zhang Yuying, president of ENN Energy, said in an interview. “As more gas production and processing capacity comes on stream, I expect the excess supply to be sustained well into 2022.”
In China, however, gas demand is expected to hold up in 2020 at close to last year’s level, and production will be sustained at recent years’ “high level” since producers have been incentivised to develop projects as planned, given the state gas pipelines reform, said Zhang, whose firm is based in the northern Hebei province.
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ENN served 20.9 million residential customers in 2019, according to its annual report. Most of ENN’s 149,000 commercial and industrial customers have seen consumption recovered to pre-pandemic levels, Zhang said, as the firm aims to increase its gas volume by 12 to 15 per cent this year, he said.
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An industry reform last year has seen China forming the National Petroleum and Natural Gas Pipe Network Group to manage the nation’s oil and gas pipelines to help secure its long-term energy supply.
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