The main fields and management mode of downstream application of natural gas

At present, the types of city gas used in China mainly include artificial gas, natural gas and liquefied petroleum gas. Among them, the production cost of artificial gas is high, there is a certain pollution to the environment, and it is dangerous, and the use of artificial gas in the application is decreasing. The application of natural gas and liquefied petroleum gas has become the mainstream, and natural gas has a broader application development space because of its clean, environmental protection and safety characteristics.

Natural gas can be applied to residents' daily life, manufacturing, power generation and heating, transportation and many fields, and is closely related to users. Based on the industrial background of accelerating domestic urbanization process, rising demand for energy conservation and environmental protection, and continuous improvement of infrastructure and policies, after years of development, the application scope of natural gas has been expanding, gradually moving toward the main energy source, and the prospect is generally optimistic.

In order to improve the allocation efficiency of natural gas resources and ensure the security of national energy supply, China implements the policy of regional franchising of urban pipeline gas. The city gas franchise belongs to a class of municipal public utility franchise, and the enterprise has the right to operate exclusively within the franchise area, maintain the implementation of municipal pipeline gas, supply gas to users in the form of pipeline transportation, and provide emergency repair and emergency services of related pipeline gas facilities and so on.

Companies that have been granted urban gas concessions generally have their own regional transport infrastructure system to undertake upstream gas sources and sell them to applications. In recent years, the acceleration of urbanization has brought a lot of dividends to gas operations. According to Wind Information, from 2010 to 2015, the sales revenue of gas production and supply industry increased by 618.71%, and the total profit increased by 507.10%.

From the cost-benefit analysis, the upstream mining party and the importer have the price dominance of the transportation link at the same time, the gas pricing power is controlled by the relevant competent departments, the downstream application side has low bargaining power on the gas source price, the cost is basically transparent, the unit profit is basically fixed, and the scale effect can only be achieved through the growth of sales volume. Under the background of the gradual opening of upstream exploration and development and pipeline network facilities, some powerful gas companies are also seeking to extend the industrial chain to the upstream and storage and transportation links.

According to the main ways of domestic natural gas utilization, the downstream application fields can be divided into residential gas, industrial chemical power, power generation and heating, and transportation energy.

Household gas

As residential gas, natural gas is mainly used for cooking, heating and other fuels, and residential gas is the priority in China's natural gas consumption. During the "13th Five-Year Plan" period, the domestic urbanization rate is targeted at 60%, and the growing demand for efficient and clean natural gas in new urbanization will accelerate the construction of urban gas pipe network and improve the rate of natural gas in urban residents. It is estimated that each percentage point increase in the urbanization rate will increase the annual energy consumption equivalent to 80 million tons of standard coal, and accelerating the construction of new urbanization will bring benefits to the use of natural gas.

In the traditional business model of residential gas company, the cost includes infrastructure construction cost, gas source cost, management and labor cost, etc. The main income is initial installation cost and gas sales cost. The gas source price is the main factor affecting the economic benefits of enterprises, because the gas sales price is strictly controlled by the relevant departments, and is easily affected by various factors, in some cases, it is easy to form a civil gas price upside down, resulting in losses.

Recently, the National Development and Reform Commission issued a policy to rationalize the price of residents with valve stations, requiring the establishment of a flexible price mechanism that reflects changes in supply and demand, and decided to implement a seasonal price difference policy to encourage market-oriented trading. The gas involved in rationalizing the price of residential valve stations accounts for about 15% of the total domestic consumption, and it is expected that there will be follow-up adjustment measures.

Industrial chemical industry

Natural gas as an industrial fuel can be used in textile, building materials, electromechanical, petrochemical, metallurgy and energy industry and other fields, natural gas as a chemical raw material can be used in urea, methanol and liquefied LNG, industrial and chemical gas accounted for about 38% of the total.