Natural gas: Steady growth is still in sight

Natural gas doesn't seem to have much room to move, either in price or volume. While gas sales declined for the first time in 2022, the impact on both the price and volume sides was very limited. Therefore, companies in all links of the natural gas industry chain do not have much impact.

Earlier, the "three barrels of oil" in the upstream released a series of 2022 performance forecasts.

Cnooc expects full-year profit for 2022 to range from 139.6 billion yuan to 143.6 billion yuan, up 99% to 104% year on year. Petrochina expects full-year profit of 145 billion yuan to 155 billion yuan in 2022, up 57 percent to 68 percent year on year. In accordance with Chinese Accounting standards for Business Enterprises, Sinopec expects to achieve a net loss attributable to shareholders of the parent company of approximately 2.605 billion yuan to 3.184 billion yuan in 2022.

Sinopec explained the reasons for the loss as follows: in 2022, the price rose sharply, the market demand was weak, the average price increase of petrochemical products was less than the average increase of crude oil prices, and the gross profit of products decreased; Affected by the COVID-19 epidemic and the company's installation accidents, the company's crude oil processing volume decreased significantly compared with the previous year; The company's investment income fell sharply.

Despite Sinopec's turnaround from profit to loss, the performance of CNOOC and petrochina remains strong.

The same goes for downstream sales companies.

Anhui Natural Gas is expected to achieve annual net profit attributable to shareholders of listed companies in 2022 of 238 million to 291 million yuan, an increase of 15.41% to 41.05 percent; Non-withholding net profit attributable to shareholders of listed companies ranged from RMB234 million to RMB286 million, up 17.66% to 43.80% year-on-year.

Kaiten Gas achieved operating income of 455 million yuan in 2022, down 0.91% year-on-year; Net profit was 60.62 million yuan, down 16.99% year-on-year; Profit after deducting non-payment was 56.16 million yuan, down 20.44% year-on-year.

The total operating revenue of Chengdu Gas Company in 2022 was 4.838 billion yuan, an increase of 10.41%, of which the sales revenue of natural gas was 3.913 billion yuan, an increase of 2.83%; Net profit attributable to shareholders of listed companies was 493 million yuan, an increase of 0.96%.

Shaanxi Natural Gas is expected to achieve net profit attributable to shareholders of listed companies of about 636 million yuan in 2022, an increase of 51.011%.

In other words, although natural gas consumption has declined for the first time in history, the impact on related companies in the industry chain is very limited.

The transformation of the energy structure accelerated

Natural gas is a traditional energy source, but it is also a clean energy source. Under the background of carbon peak and carbon neutrality, the development prospect of natural gas is still good.

In 2021, China's natural gas consumption reached 378.694 billion cubic meters, an increase of 12.50% year-on-year, and the compound annual growth rate from 2017 to 2021 reached 11.93%, and the demand for natural gas maintained a rapid growth trend.

Shandong Laibai's "14th Five-Year Energy Development Outlook" shows that from 2016 to 2020, the growth rate of coal consumption is only 0.42%, and the growth rate of natural gas consumption is 10.7%, and the role of natural gas for coal is obvious.

Not only that, since the "14th Five-Year Plan", China's energy transformation has continued to break through, and the performance of the new energy power generation industry is especially bright. According to the "year-end report card" released by the National Energy Administration at the end of 2021, the installed capacity of renewable energy in China exceeded 1 billion kilowatts, the installed capacity of hydropower and wind power exceeded 300 million kilowatts, and the installed capacity of offshore wind power ranked first in the world. The annual power generation of new energy sources such as wind power, solar power and biomass power generation exceeded the 1 trillion KWH mark for the first time, continuing to maintain its lead.

According to the "Notice on Matters related to the development and Construction of wind power and photovoltaic power generation in 2021" issued by the National Energy Administration in 2021, the proportion of wind power and photovoltaic power generation in the whole society reached about 11%. By 2022, that share will increase to about 12.2 percent.

With the rapid growth of natural gas and new energy sources, the proportion of coal power generation continues to decline. From 2012 to 2021, the share of coal in China's total energy consumption will decrease from 68.5 percent to 56 percent, the share of natural gas will increase from 4.8 percent to 8.9 percent, and the share of wind power and photovoltaic power generation will increase from 2.14 percent to 11.73 percent.

According to the Statistical Review of World Energy 2022, the proportion of global natural gas consumption in primary energy consumption in 2021 is 24%. Compared with the world, China's natural gas share is still at a low level. Chinese government authorities have set a goal of raising the share of natural gas in primary energy consumption to about 15% by 2030. From this point of view, China's natural gas proportion is still large room for improvement.