China speeds up gas production, supply and sale system

On 30 August 2018, the State Council issued Several Opinions on Promoting Co-ordinated and Stable Development of Natural Gas, which gave some specific and practical opinions in terms of natural gas production, supply, storage and sale.

As one of the world’s biggest gas consumers, China contributed more than 30% to the increase in world natural gas consumption in 2017, becoming the main driving force for the development of natural gas around the globe. However, China’s domestic natural gas production growth rate is lagging behind that of consumption. In 2017, the annual consumption was 238.6 billion cubic metres, surpassing output of 148 billion cubic metres.

The exploration and exploitation of natural gas in China is underdeveloped, far below the world average. The opinions specifically require a strengthening of capacity in domestic exploration and development, encouraging the oil and gas companies to increase investment and working in exploration and exploitation, with the objective of achieving a domestic production volume of more than 200 billion cubic metres by the end of 2020.

Wang Jihong is a partner and Liu Ying is a senior associate at Zhong Lun Law Firm