China Entering Winter With A Severe Natural Gas Shortage

natural gas

Natural gas shortages (as much as 40 per cent) are expected to continue in China, as an unexpectedly harsh winter arrived early and shows no signs of leaving anytime soon. In an effort to conserve natural gas, industrial facilities, office buildings, and hotels have closed in cities in both the north and south.

Chron.com: The shortages began nearly two weeks ago. On November 13, PetroChina which produces 70 per cent of domestic gas in China, issued an emergency announcement to its gas distributors saying that it would limit supplies. Sinopec also started to apply similar gas supply restrictions on the same day.

Today, China Petroleum Daily, a publication of CNPC, the parent of PetroChina, predicted that the gas shortages will continue through December and January, with shortages reaching about 300 million cubic feet per day in the north, and about 200 MMcf/d in the south.

“Ostensibly this natural gas supply crisis is caused by the weather. In fact, the crisis is caused by a lack of gas supply,” said Dong Xiuchen, a professor at China Petroleum University. The root of the problem “is the natural gas price control by the government. To oil and gas industries, if there is no profit for their businesses, they then don’t have the resources and motivation to explore for more oil and gas reservoirs. 

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