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



I. Basic overview of the industry

Natural gas refers to all gases naturally existing in nature, including gases formed by various natural processes in the atmosphere, hydrosphere, and lithosphere (including oil field gas, gas field gas, mud volcano gas, coal bed gas and biogenic gas, etc.).

According to the "In-depth Research Investment Strategy Evaluation Report on the status quo of China's Natural gas Industry (2023-2029)" released by the Research Report network, the definition of "natural gas" that has long been commonly used is a narrow definition from the perspective of energy, which refers to the mixture of hydrocarbon and non-hydrocarbon gases naturally contained in the formation. In petroleum geology, it usually refers to oil field gas and gas field gas. Its composition is dominated by hydrocarbons and contains non-hydrocarbon gases.

Natural gas is one of the safer gas, it does not contain carbon monoxide, but also lighter than air, once leaked, will immediately spread upward, not easy to accumulate to form explosive gas, safety is relatively high compared with other fuels.

The use of natural gas as an energy source can reduce the use of coal and oil, thus greatly improving the environmental pollution problem; As a kind of clean energy, natural gas can reduce sulfur dioxide and dust emissions by nearly 100%, reduce carbon dioxide emissions by 60% and nitrogen oxides emissions by 50%, and help reduce acid rain formation, slow down the earth's greenhouse effect, and fundamentally improve environmental quality.

As a vehicle fuel, natural gas has the advantages of high unit calorific value, low exhaust pollution, reliable supply and low price, and has become the development direction of the world's vehicle clean fuel, and natural gas vehicles have become the fastest growing and most used new energy vehicles.

However, for the greenhouse effect, natural gas, like coal and oil, produces carbon dioxide. Therefore, natural gas cannot be regarded as a new energy source. Its advantages are:

(1) Green environmental protection

Natural gas is a kind of clean and environmentally friendly high-quality energy, almost free of sulfur, dust and other harmful substances, burning less carbon dioxide than other fossil fuels, resulting in a lower greenhouse effect, so it can fundamentally improve the quality of the environment.

(2) Economical

Compared with artificial gas, natural gas has a comparable calorific value price, and natural gas is clean and clean, which can extend the service life of the stove and help users reduce maintenance costs. Natural gas is a clean gas with a stable supply and improved air quality, thus providing a new impetus for economic development in the region, driving economic prosperity and improving the environment.

(3) Safe and reliable

Natural gas is non-toxic, easy to distribute, lighter than air, not easy to accumulate into explosive gas, is a relatively safe gas.

(4) Improve your life

With the use of safe and reliable natural gas in households, the home environment will be greatly improved and the quality of life will be improved.

Calculation of natural gas oxygen consumption: 1 cubic meter of natural gas (100% purity) completely burned about 2.0 cubic meters of oxygen, about 10 cubic meters of air.

Second, industry development status

1. Global market

The era of large-scale development of natural gas began after 1970. In the early 1990s, the United States took the lead in natural gas futures trading, and the development of natural gas industry system was more perfect. Since the 21st century, with the technological reform and innovation, more and more new natural gas industry has emerged and continued to develop.

By 2021, the global natural gas market size is about 1,636.9 billion US dollars, of which Asia, as the world's largest region in terms of population and industrial manufacturing, is also the world's largest regional market for natural gas.

2. Chinese market

China's natural gas industry began to develop gradually after the founding of New China. From the 1980s to the beginning of the 21st century, the discovery of gas fields, the proven reserves and the construction of gas pipelines all over China have promoted the industrial application of natural gas energy. Geological exploration involves Sichuan, Shaanxi, Gansu and Ningxia, Tarim of Xinjiang, Sulige of Inner Mongolia and Hainan Island and other regions. Since 1949, China's modern natural gas industry has entered the development stage. From the geological exploration in Sichuan, it extends to Shaanganning, Tarim Basin and coastal areas, and carries out large-scale natural gas exploration activities. In 1958, the first gas transmission pipeline was laid in the Sichuan Basin, with a length of 20 kilometers and a diameter of 159 mm, from the Huangguashan gas field in Yongchuan to the Yongchuan Chemical Plant.

The market size of China's natural gas industry is highly related to the development of the national economy and industrial production. The global LNG market has more than doubled in size since 2011, which has attracted dozens of smaller traders. However, the gas supply crisis since last year has led to a surge in demand for LNG worldwide, coupled with a limited number of available shipping vessels, and a sharp rise in LNG shipping prices. In recent years, with the acceleration of China's urbanization process and the improvement of environmental protection, especially the construction and improvement of large-scale infrastructure such as long-distance pipelines, China's natural gas consumption structure has gradually changed from chemical and industrial fuel to diversified consumption structure, among which urban gas, natural gas power generation, LNG vehicles and other consumption has been greatly developed. In 2021, the market size of China's natural gas industry will reach 1112.281 billion yuan.

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".