Gas demand growth in China slows as economy hits consumption

China’s slowing economy is expected to restrict demand for natural gas this year, despite state plans to shift another 4.93 million households away from coal this winter.

State-run Sinopec Gas is predicting natural gas demand to reach 307 billion cubic metres (bcm) this year, an increase of just 10 per cent, compared to 17 per cent in 2018, as consumption rates respond to weakening economic conditions.

Any demand increase is expected to boost imports of the fuel to China, which is the world’s second largest importer of liquefied natural gas after Japan. Last year China produced 160.2 bcm of gas and imported 124.8 bcm, of which 74.3 bcm was LNG, with pipeline gas making up the rest.

“Due to the macroeconomic situation and the government’s easing push to the coal-to-gas programme, China’s gas consumption growth is slowing,” Sinopec’s deputy chief economist Wu Gangqiang said in prepared remarks on Tuesday which were read by a Sinopec official.

In its steady push to clear smoke-blanketed skies, China is forcing homes and industrial plants to cut use of coal, which fuels emissions of toxic sulphur dioxide and greenhouse gases, in favour of cleaner energy, such as renewables and natural gas.

China has been encouraging use of natural gas, as it is more efficient and cleaner than coal, which constitutes the bulk of its primary energy use, and aims to add another 4.93 million households to its coal-to-gas or electricity plan this winter.