China National Petroleum Corp, Asia's biggest oil and gas producer, will increase its investment in natural gas exploration and production, pipeline construction and gas sales in the coming decade, betting big on the country's thirst for the clean fuel.
The State-owned company, which currently allocates 70 percent of its total budget to natural gas production and around 10 percent to gas pipeline construction, is expected to increase these figures as it focuses more efforts on its gas business, said Hou Qijun, head of CNPC's planning department.
The Beijing-based oil and gas company will expand its gas annual output to 180 billion cubic meters by 2020 from the current capacity of 120 billion cu m, according to Hou.
"Natural gas production is our top priority with high potential for profit growth," Hou told China Daily on sidelines of a forum held by the CNPC Research Institute of Economics and Technology.
Despite the world's oil majors all having cut their spending on future projects as plummeting crude oil prices have slashed their profits, CNPC is aiming to secure demand and increase gas output.
"The downward trend in natural gas is only a temporary situation, affected by falling oil prices, but it will become one of the most profitable businesses in China," Hou said.
PetroChina, CNPC's listed arm, posted its first quarterly loss in April. Its profits from natural gas and pipelines slumped nearly 36 percent to 4.7 billion yuan (US$714 million) in the first three months of 2016.
Gao Jian, a senior analyst at commodities consultancy Sublime China Information Co Ltd, said natural gas lost its competitive edge over cheap oil in recent years, but gas prices will rebound due to increasing demand.
"As a clean energy option, natural gas is also cost-efficient and reliable compared with other renewables, such as wind and solar. It will play an important role in the country's shift toward green energy," he said.
China's natural gas consumption will surge to 510 billion cu m by 2030 and 710 billion cu me by 2050, according to the 2050 energy outlook of CNPC's research institute.
Du Wei, head of the research institute, said that natural gas demand is expected to grow at an annual rate of 3.8 percent between 2014 and 2050.
- CBCSD and Members Participated and Suggested on the Project for Technical Regulation on Low-carbon Pilot Community
- CBCSD and Members Participated in the APEC Cooperation Network Construction Forum of Green Supply Chain
- Calculation Method of CO2 Emissions in Petroleum and Natural Gas Exploitation Enterprises & Calculation Method of CO2 Emissions in Water Network of Chemical Enterprises
- CBCSD Attended the Workshop for Environmental Protection and Sustainable Development and Delivered Introductions
- WBCSD: Tackling the Challenge, How to Make Informed Choices on Forest Product?
- The National New-Type Urbanization Plan Released, Board Members of CBCSD Help the Sustainable Development of Cities
- Board members of CBCSD Actively Participated in the Carbon Trading and International Climate Change Process
- Two industrial Standards Compiled by CBCSD Passed Examination
- Widespread Use of the Achievements Businesses Energy Saving and Greenhouse Gas Management
- CBCSD held Chemical industry enterprise value chain (range 3) greenhouse gas emissions, accounting and reporting guidelines