China’s Demand for Natural Gas to Soar with Environment Concern
China will definitely raise the bar for natural gas importation as it gets more aware of the impacts of its fuel emission contributions to the environment over the last decade.
According to the International Energy Agency, China's demand for "clean" energy is forecast to quadruple in this decade alone as it seeks to cut pollution. On Sunday, China, along with fellow emerging economy India, promised to cooperate toward an international treaty that would limit fossil-fuel emissions not only of industrialised nations but also emerging economies like them as well.
China, as the world's biggest energy consumer, has been mostly reliant on coal to fuel its energy requirements, emitting more of the greenhouse gases blamed for global warming than any other nation. But in its five-year plan through 2015, a major development occurred when the country recognised its own hazardous fuel emission contributions and ultimately made a conscious decision to reduce its carbon dioxide emissions by as much as 17 per cent per unit of gross domestic product during the period.
At present, gas accounts for less than 1 per cent of China's power generation, compared with the United States' 23 per cent and 48 per cent in Russia, according to Bloomberg rankings based on World Bank data.
Analysts and experts agree that China is serious in sourcing prospects for cleaner-burning fuels to support its economic momentum.
"Gas use in China is really set to take off as they take environmental benefits into account," analyst Helen Lau said in Bloomberg News. "China is well aware that without gas there will be no sustainable growth."
China's GDP grew 9.1 per cent in the third quarter from a year ago, outperforming every other major economy amid the ongoing global fiscal meltdown. It has also exceeded its 7.5 per cent annual target in the five years ended 2010. The world's second-largest economy targets a 7 per cent growth rate for the 12th five-year plan.
China, to meet demand and sustain economic growth, is forecast to purchase 44 million tonnes annually of liquefied natural gas by 2020, Philip Olivier of GDF Suez told Bloomberg News.
Chinese companies have been aggressively making acquisitions in gas companies. Just recently, China Petroleum & Chemical Corp. (Sinopec) and ENN Energy Holdings Ltd. offered to buy China Gas Holdings Ltd. at $2 billion cash. The acquisition will enable both companies to control a distribution network that covers 20 provinces, thereby steadily providing energy requirements to its 6.6 million residential customers and 41,981 industrial and commercial users in China.
Sinopec's parent, China Petrochemical Corp., is also bidding for gas assets in Canada, the U.S. and Australia to expand reserves.
Imports of LNG grew 27 per cent to 5.2 million tons in the first half of 2011.
In its latest World Energy Outlook, the IEA said China's use of gas for electricity generation will quadruple to 72 million tonnes by 2020 and 157 million tonnes by 2035.
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