China's natural gas consumption saw strong growth in the first five months of 2024, primarily due to declining gas prices and diversified feed gas supplies, according to OilChem.
Source: OilChem
The apparent consumption of natural gas in May stood at 35.58 billion cubic meters, up 6.40% year-on-year. This was the lowest year-on-year growth in 2024, which was attributed to a decrease in residential and industrial electricity consumption due to the rainy season in South China.
The natural gas consumption over January-May 2024 jumped 9.26% year-on-year, higher than the expected growth of 5%-8%, because the natural gas consumption in the first quarter reached 108.76 billion cubic meters, jumping 11.57% year-on-year compared with a growth of only 3.12% in the first quarter of 2023.
Falling gas prices drove up the demand. The spot city gas prices were significantly lower than the same period last year, which attracted more downstream users. Especially after March, the gas prices at Yuan 2.90-3.10/cubic meter appealed the downstream users.
2023-2024 PetroChina West Regions' Spot Gas Prices (Unit: Yuan/cubic meter)
|
|
Lowest in 2023 |
Highest in 2023 |
Average in 2023 |
Lowest in 2024 |
Highest in 2024 |
Average in 2024 |
YoY |
|
Jan |
5.20 |
5.62 |
5.41 |
5.60 |
5.80 |
5.70 |
5.36% |
|
Feb |
5.70 |
5.80 |
5.75 |
3.81 |
4.00 |
3.91 |
-32.09% |
|
Mar |
4.01 |
4.25 |
4.13 |
3.05 |
3.2 |
3.12 |
-24.33% |
|
Apr |
/ |
/ |
/ |
3.00 |
3.20 |
3.10 |
/ |
|
May |
3.92 |
3.96 |
3.94 |
2.95 |
2.97 |
2.96 |
-24.87% |
Source: OilChem
Moreover, higher LNG prices propelled the coastal industrial users to purchase PNG again. From April to June, LNG prices remained higher than PNG prices for major users, causing the main downstream city gas and industrial users in coastal areas reluctant to purchase LNG any more.
Industrial Gas Prices of Some Cities (Unit: Yuan/cubic meter)
|
City |
Type of Gas |
Jun 27 |
Chg |
|
Langfang City, North China's Hebei Province |
PNG |
2.90 |
0 |
|
LNG |
3.29 |
0 |
|
|
Spread (LNG-PNG) |
0.39 |
-- |
|
|
Zibo City, East China's Shandong Province |
PNG |
2.90 |
0 |
|
LNG |
3.31 |
-0.02 |
|
|
Spread (LNG-PNG) |
0.41 |
↓ |
Source: OilChem
Additionally, besides PetroChina, Sinopec and CNOOC, the gas suppliers in China were also increasing. In the first quarter of 2024, the natural gas production of the three oil giants took up 82%, a decrease of 3 percentage points from 2023, while the gas production of Shaanxi Yanchang and other supply entities that produce coal-to-gas and coalbed methane accounted for 18%, up 3 percentage points.
Source: OilChem
The increase in supply entities has reduced the difficulty and prices of obtaining spot feed gas for city gas enterprises and large industrial users, releasing some of the suppressed demand in the early stage, and further promoting the increase in natural gas consumption.
Written by Sunny Fang, fss@oilchem.net
Edited by Aggie Hu, huchenying@mysteel.com
