China to Import 260Mt of Oil and 20Bcm of Natural Gas by 2010

SHANGHAI (Interfax-China) -- China's net energy imports may reach as much as 260 million tonnes of oil and 20 billion cubic metres of natural gas by 2010, a senior researcher with National Development and Reform Commission (NDRC), the country's top economic planner, said over the weekend.

The number will rise further to 380 million tonnes of oil and 100 billion cubic metre of gas by 2020, Jiang Xinmin, assistant director at NDRC's Energy Research Institute, said.

The increased import volume will come amid soaring demand for energy resources to fuel China's rapid economic growth, including the rapidly rising number of cars.

China's demand for oil is forecasted to stand at 450 to 500 million tonnes, and its demand for natural gas 100 to 120 billion cubic metres by the end of the decade. While oil demand will further rise to 550 to 600 million tonnes by 2020, the country will need 200 to 240 billion cubic metres of natural gas by then, more than double what is expected for 2010.

China has been a net oil importer since 1993 and imported a total of 181.56 million tonnes of oil last year. However, oil consumption, which is the second most important energy source for the country after coal, is expected to slow down in the future due to its historically high prices as well as intensified efforts to develop alternatives such as bio-fuels, compressed natural gas and coal-based liquids.

Natural gas usage, in the meantime, will see an explosive growth, as China considers it to be a cleaner replacement for other fossil fuels. The Chinese government aims to have gas account for 5.3% of total energy consumption by 2010, almost double the 2.8% figure it represented in 2005.

According to an energy blueprint released by the National Development and Reform Commission (NDRC) on April 10, China aims to produce 193 million tonnes of oil and 92 billion cubic metres of natural gas by 2010.

While the target represents a mere 5% growth in oil output compared to last year, or 2.12% in annual growth, the gas target represents a 56% jump in natural gas production, necessitating growth of 12.6% a year.

The country's top economic planner also said that it aims to make crude oil account for 20.5% of the country's total energy consumption by 2010, down 0.5% from 2005. Natural gas usage is to increase during this period, accounting for 5.3% of consumption by 2010, almost double the 2.8% figure it represented in 2005.

The world's second-largest energy consumer produced 184 million tonnes of crude oil and 59 billion cubic metres of gas in 2006.

In other news, China has plans to eliminate 1.6 million tonnes of outdated ethanol production capacity by 2010, and 400,000 tonnes will be eliminated by the end of the year, according to a notice released by the National Development and Reform Commission yesterday.

"This should have little impact on the corn futures market, as it follows recent government curbs on new grain-based ethanol plants," analyst Liu Xinghua, with Great Wall futures, said.

Last month, a high-level Chinese official said the government will not approve new grain-based ethanol fuel projects due to grain supply concerns, and that companies currently engaged in corn-based ethanol projects will be ordered to gradually shift to non-grain ethanol projects, state-run Xinhua news agency reported.

(c) InterFax-China 2007. For more intelligence on Chinese metals and mining, click here or contact David Harman in Hong Kong at david.harman@interfax-news.com or (852) 2537-2262.

Comments
comments powered by Disqus

Market Data

Sponsored By: