South China Morning Post: Sinopec Looks to Natural Gas as Oil Prices Fall

China Petroleum & Chemical (Sinopec), the nation’s second-largest oil and gas producer and the world’s second-biggest oil refiner, aims to almost double its natural gas output in the five years to 2020 while cutting oil production amid low prices.

The company, which needs a crude oil price of at least US$60 a barrel for its oil production operation to break even, has made major natural gas discoveries in the past decade that allowed it to raise gas production substantially. The trend is set to continue.

It has set a target to raise gas output to 40 billion cubic metres (bcm) in 2020 from 20.8 bcm last year. Adding imported gas, it aims to supply a total of 53 bcm in 2020.

“Our proven gas reserves and development work are sufficient to meet our target,” chairman Wang Yupu told reporters Wednesday. “We have made significant new discoveries in the Sichuan and Ordos [gas] basins.” MORE