Analysis of supply and demand situation and development prospect of China's natural gas market in 2022



1. China's natural gas reserves: In 2021, the newly proved geological reserves will be about 1,381.5 billion cubic meters

According to the data of China's Ministry of Natural Resources, China's new proved reserves of natural gas continue to grow rapidly, with an average annual compound growth rate of 7% from 2013 to 2020. In 2020, the confirmed geological reserves of natural gas will increase by 1.29 trillion cubic meters. Among them, the new proved geological reserves of natural gas, shale gas and coal bed gas reached 1,035.7 billion cubic meters, 191.8 billion cubic meters and 67.3 billion cubic meters respectively. Shale oil and gas exploration has achieved multi-point flowering, and new breakthroughs have been made in the exploration and development of deep shale gas in the Sichuan Basin, further consolidating the resource base for increasing shale gas storage and production. According to preliminary statistics, in 2021, China's newly proved geological reserves of natural gas will be about 1,381.5 billion cubic meters.

2. China's natural gas production is rising steadily

In recent years, China's natural gas production has been increasing year by year. In 2015, China's natural gas production was 127.141 billion cubic meters, an increase of only 3.02%, and the growth rate declined sharply. On the one hand, the macroeconomic transformation leads to the downward growth of total energy consumption; On the other hand, the shale oil revolution has brought about a loose supply environment for oil and gas resources, and the cost advantage of oil and gas imports has led to the increasing dependence on foreign imports of natural gas in recent years.

Since 2016, China's natural gas production growth rate fluctuated upward, according to the National Bureau of Statistics data, in 2021, China's natural gas production exceeded 200 billion cubic meters, reaching 205.26 billion cubic meters, an increase of 8.69%. Natural gas production has grown faster than consumption for two consecutive years, and the ability to ensure supply security has continued to improve.

3. China's natural gas consumption is growing rapidly

From 2012 to 2020, China's natural gas consumption also increased year by year, but the growth rate has slowed down in the past two years. According to the National Development and Reform Commission data, in 2020, China's apparent consumption of natural gas is 324 billion cubic meters, an increase of 5.6% over the same period in 2019, and the growth rate is 3.1 percentage points lower than the same period in 2019. In 2021, the apparent consumption of natural gas in the country will be 372.6 billion cubic meters, an increase of 12.7% year-on-year, maintaining a continuous upward trend.

4. The gap between China's natural gas supply and demand continues to widen

China is the world's second largest natural gas consumer, although China's natural gas production continues to increase, but the current natural gas production still can not meet the accelerating growth of natural gas demand. Energy security is related to the future of our country, and the shortage of natural gas in our country needs to be improved urgently.

In 2020, the gap between the supply and demand of natural gas in China will reach 135.2 billion cubic meters, an increase of 1.56% year-on-year, and the growth rate will decrease significantly. From China's natural gas production and consumption data can also be seen, China's natural gas production growth rate has been higher than the consumption growth rate for two consecutive years, in 2021, China's natural gas supply and demand gap continues to expand, reaching 167.3 billion cubic meters, it is expected that the future of China's natural gas supply will continue to improve the status quo.

5, China's natural gas supply and demand balance forecast: in the short and medium term, China's natural gas supply and demand is still facing a large gap

Natural gas belongs to the field of clean energy, which is a key industry supported by China in recent years, and has broad development prospects. With the continuous progress of the "seven-year Action Plan to increase storage and production", the national natural gas production has grown rapidly, and the new proved geological reserves have maintained a peak level. In the future, China will continue to focus on domestic security of supply and promote sustained and steady growth of natural gas. The National Energy Administration expects China's natural gas production to reach more than 230 billion cubic meters in 2025, and stabilize at more than 300 billion cubic meters in 2040 and a longer period after that.

In terms of demand, natural gas, as the cleanest and low-carbon fossil energy, will help achieve the goal of carbon peak and carbon neutrality in the future. The state will actively promote the high-quality development of the natural gas industry. Through reasonable guidance and market construction, the National Energy Administration expects China's natural gas consumption to reach 430 to 450 billion cubic meters in 2025 and 550 to 600 billion cubic meters in 2030.

From the National Energy Administration's forecast of China's natural gas production and consumption, there is still a large gap between China's natural gas supply and demand in the short and medium term. However, from the perspective of the current trend of substantial growth in China's natural gas exploration and a series of policies for natural gas production, the National Energy Administration's forecast of natural gas production is conservative, and it is expected that with the further improvement of China's natural gas mining technology and infrastructure construction process, the future growth rate of natural gas production is expected to continue to outperform consumption growth. That is, the growth rate of the natural gas supply and demand gap will likely fluctuate downward, and the natural gas supply and demand gap is expected to stabilize within 150-200 billion cubic meters.