China's gas consumption may post first fall in 20 years

China's 2022 natural gas consumption may post the first decline in two decades amid a struggling economy, with demand this winter set to rise more modestly than in previous years, state energy officials said on Thursday.

Total gas demand is likely to fall 1 per cent this year to 363.6 billion cubic metres, said Li Jianping, a researcher with China National Offshore Oil Company, which will mark the first annual decline since at least 2002, reports Reuters.

Gas consumption this winter is pegged at between 168 to 190 billion cubic metres, a wide range forecast due to uncertainties over weather conditions and economic recovery, officials told a seminar hosted by state-backed Chongqing Gas Exchange that is live streamed.

China is set to hand back to Japan this year its title as the world's largest importer of liquefied natural gas as protracted Covid-19 curbs and high import costs hampered demand, easing the pressure on tight global supplies amid the Ukraine crisis.

While slashing high-priced LNG imports, companies are set to ramp up domestic production, fill up gas storage facilities and increase imports of cheaper pipeline gas from Russia and Central Asia.

"Our winter supply policy is stabilizing piped gas imports from Central Asia, boosting volumes from Russia and increasing domestic production," said Li Wei, a gas market executive with top state giant PetroChina .

The firm, the country's largest gas producer and importer, has secured 109.5 billion cubic metres of supplies for this winter, including 59 bcm from domestic fields, Li said.

Li Wei predicted China's winter gas use at a higher range of 187-190 bcm.

The supply pool of 109.5 bcm - which includes domestic production and imports -- compared with 106.2 bcm the previous winter, representing a modest increase of 3 per cent, down from 8 per cent growth recorded in the 2021 winter over 2020.

Zhao Kui, a gas marketing executive at Sinopec Corp, said Sinopec is pumping at full capacity from its main fields -- Yuanba and Puguang-- in southwestern Sichuan basin after completing regular maintenance.

Sinopec is also replenishing LNG inventories at two large import terminals in Tianjin and Qingdao with storage levels at 80 per cent or above by mid-November, Li added.

China has so far established gas storage capacity of 26 bcm, equivalent to 7 per cent of total demand, to cope with peak winter heating demand, said Li Jianping, the CNOOC researcher.

Companies have also set up contingency plans to cut supplies to the so-called "disreputable users" - mostly industrial and commercial users -- to prioritise residential consumers during cold spells, officials said.