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CHINA DATA: October natural gas output rises 5% on month to 16.5 Bcm

China produced 16.5 Bcm of natural gas in October, up 5.1% on the month and up 0.5% year on year, according to data released Nov. 15 by the National Bureau of Statistics.

The month-on-month growth rate in October rebounded from a 1.3% decline in September, the data showed.
Over January-October, China produced 168.4 Bcm of natural gas, up 9.4% year on year.

State-owned oil and gas producers continued to ramp up their natural gas production last month in a bid to ensure gas supply in the peak winter season, market sources said.

Sinopec raised gas production from its Puguang gas field in southwestern Sichuan province by around 1.21 million cu m/day to 17.5 million cu m/day since October, local media reported.

Sinopec further increased gas production from its Fuling shale gas field in southwestern Chongqing, with eight new well being put into operations in November, adding 480,000 cu m/day of shale gas, the company said Nov. 11.

Sinopec’s Fuling shale gas field currently supplies nearly 20 million cu m/day of natural gas, and has reached cumulative gas production of nearly 6 Bcm over January-October, up 9.3% year on year, according to the company.

However, CNOOC in October suspended operations at its Lingshui 17-2 deepwater gas field, or the Deep Sea No. 1 gas field, in South China Sea and evacuated all workers due to Typhoon Kompasu, according to a report from state-owned Assets Supervision and Administration of the State Council on Oct. 21, which was expected to have affected gas production from the field to a certain extent last month.

Typhoon Kompasu, the 18th typhoon of this year, made landfall in south China’s Hainan province on Oct. 13 afternoon, bringing strong wind and heavy rain to the southern regions.

As China’s first large-sized deepwater discovery made by independent exploration, CNOOC’s Deep Sea No. 1 gas field realized full operations in September after starting on June 25. The field is estimated to have an annual natural gas output of 3 Bcm.

Meanwhile, China did not sign up to the Global Methane Pledge at COP26 that covers over 100 countries representing 70% of the global economy. The pledge aims to limit methane emissions by 30% compared with 2020 levels, but is likely to result in higher costs for gas producers.

China remains one of the world’s largest gas producers and prioritizes maintaining gas prices at affordable levels, in addition to limiting annual losses on gas sales incurred by its national oil companies.

However, the US and China said they would cooperate on reducing methane emissions. China said it would launch a methane action plan before COP27, as part of the US-China Joint Glasgow Declaration on Enhancing Climate Action in the 2020s, released late Nov. 10 at the 26th United Nations Climate Change Conference, or COP26.

Winter gas supply
China’s natural gas supply is expected to be tight during this winter-spring heating season, and some regions may even see shortages considering the global market and soaring prices, Meng Wei, spokesperson for the National Development and Reform Commission, said at the monthly briefing of the country’s top policy planner on Nov. 16.

China has raised daily natural gas supply to more than 1 Bcm/day since Nov. 7, an increase of 100 million cu m/day, or 10%, from the same period last year, as many northern regions began centralized heating in advance to cope with a cold wave that swept through parts of the country recently, Meng said.

NDRC and the National Energy Administration have coordinated with state-owned gas suppliers PetroChina, Sinopec, CNOOC, and state-owned infrastructure giant PipeChina to ensure stable gas supply during the cold wave, including measures like gas storage in the pipeline network, sourcing gas from underground storage, increasing supply to gas-fired power plants, and so on, she said.

For instance, PetroChina began supplying gas from its Liaohe gas storage cluster from Nov. 6, for initial volumes of around 9 million cu m/day of gas to the national trunk pipelines, the company said Nov. 8.

Other measures include making sure gas purchase and sales contracts are strictly implemented, with residential gas demand well covered, and strict price controls, according to Meng.

In addition, China will increase gas production and operate domestic gas fields at full capacity, Meng said, noting that the NDRC will divert gas supply to the regions where it is most needed.
Source: Platts

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