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New characteristics of China’s natural gas production, supply, storage, and distribution system are gradually emerging

2019-09-04View Original

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At present, the main entities responsible for upstream exploration and development of natural gas in our country are the \"three major oil companies.\" These companies operate in a integrated manner that covers production, transportation, storage, and sales; as a result, there is only one market player, no competitive mechanism exists, and the capacity to supply gas is limited. “**The establishment of pipeline network companies will lead to a more diversified development of upstream market players. The separation of production and operation facilitates the fair access to infrastructure and improves its efficiency, thereby helping to unleash supply capacity. ”Dong Xiucheng, director of the Belt and Road Energy Trade and Development Research Center at the University of International Business and Economics, said. Wang Songqiu, vice president of the China Urban Gas Association, noted that from an upstream perspective, China’s natural gas supply pattern has shifted from mainly transporting gas from western sources to the east, to a situation where both the transport of gas from the west to the east and the import of liquefied natural gas (LNG) along the coast are playing an increasingly important role. Additionally, the monopoly held by the \"three major oil companies\" over exploration rights and LNG import rights has given way to a situation in which such rights are being gradually opened up. In terms of midstream transportation and storage, China’s long-distance natural gas pipelines, LNG receiving stations, and gas storage facilities are mainly concentrated in the \"Big Three\" oil companies, while short- to medium-distance gas pipelines are primarily found in provincial pipeline networks and urban gas companies. At present, there is a lack of motivation for investment in pipeline networks in our country; construction progress is slow, and the level of interconnection is insufficient.

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