The current situation of China's natural gas industry market is short of supply and industrial gas field accounts for the largest proportion

At present, natural gas is mainly used in four aspects in China, which are city gas, chemical industry, industrial field and power generation. In 2021, China's macro economy achieved a good start in the "14th Five-Year Plan", and the national natural gas consumption was 372.6 billion cubic meters, an increase of 38.611 billion cubic meters, an increase of 11.56%. In 2021, the proportion of natural gas in China's total primary energy consumption rose to 8.9%, an increase of 0.5 percentage points over the previous year. In terms of consumption structure, industrial gas accounts for 40% of total natural gas consumption. Gas for power generation accounted for 18%; City gas accounted for 32%; Chemical fertilizer gas accounted for 10%.

During the "13th Five-Year Plan" period, driven by the industrial coal to gas policy, China's industrial gas consumption has increased significantly, and in 2020 China's industrial gas consumption has reached 123.576 billion cubic meters, accounting for 37% of the total natural gas consumption, and in 2021 China's industrial gas consumption has reached 149.04 billion cubic meters.

Urban gas: China's urbanization process and the trend of household miniaturization are the driving forces for the sustainable growth of urban natural gas consumption. With the acceleration of China's urbanization process, the urban population has increased rapidly, and the base of gas users has been expanded. From 2013 to 2020, China's urban natural gas consumption population continued to grow, reaching 413 million people in 2020, and the growth rate during the "13th Five-Year Plan" period was nearly 45%. According to preliminary statistics, in 2021, China's urban natural gas consumption population will be close to 450 million people, and in 2021, China's residential gas consumption will reach 119.32 billion cubic meters.

With the rapid increase of China's urban population, the base of gas users will continue to rise. At the same time, with the growth of the number of households in China, the demand for urban gas connection services and per capita gas consumption will increase. In addition, China's current urban pipeline gas utilization rate is only about 30%, compared with the developed countries and even the first-tier cities in the southeast coast 80-90% pipeline gas utilization rate still has a huge room for improvement. To sum up, the development prospects of China's urban gas consumption are broad.

Third, industry supply and demand scale

1. Availability

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 207.580 billion cubic meters, an increase of 7.8%. Natural gas production has grown faster than consumption for two consecutive years, and the ability to ensure supply security has continued to improve.

2. Demand situation

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. However, due to the huge demand for natural gas energy in China, the import and export of natural gas industry in China basically presents a pattern of "all imports and zero exports".