Business Spectator: How important is gas to China's energy mix?

China relies heavily on domestic coal (and to a lesser extent oil) to meet rising energy consumption. To reduce air pollution and carbon dioxide emissions, the Chinese government is attempting to replace some of the country's coal and oil use with natural gas.

Natural gas accounted for only 4.9 per cent of China's total energy consumption in 2012, but large investments in domestic natural gas production and infrastructure, along with growing imports, are likely to underpin a significantly larger role in the future.

The Chinese government anticipates increasing its natural gas share of total energy consumption to around 8 per cent by the end of 2015 and 10 per cent by 2020.

China more than tripled natural gas production since 2003, producing 3.8 trillion cubic feet in 2012, and the government is targeting production to reach about 5.5 Tcf of natural gas per year by the end of 2015. Most of the anticipated production growth is from large onshore fields in the western and north central regions of China as well as from the offshore deepwater regions in the South China Sea. China's natural gas consumption has outstripped domestic supply since 2007, triggering rising imports of both liquefied natural gas and pipeline gas. China's natural gas consumption rose at an average annual rate of 17 per cent from 2003 through 2013, reaching nearly 5.7 Tcf in 2013. MORE