China's Total Natural Gas Supply to Nearly Double to 269.5 Bcm by 2015: Government

China's total natural gas supply is forecast to reach 269.5 billion cubic meters/year, or an average 26 Bcf/day by 2015, according to an official plan released Thursday by the government.

This is nearly double current apparent demand of roughly 14 Bcf/day. China calculates apparent gas demand by adding domestic production to net imports.

The Ministry of Housing and Urban Rural Development on Thursday released the 12th Five Year Plan for the development of city gas for 2011-2015.

To combat environmental pollution and mitigate climate change, Beijing had previously said it wanted natural gas to account for 8% of the total energy mix by 2015, up from 4.4% in 2010.

The latest plan forecasts natural gas supply to city gas users will total 120 billion cu m/year by the end of the Five Year Plan in 2015, more than double the 52.7 billion cu m/year at the end of the previous Five Year Plan in 2010.

The government aims to change gas distribution and gas sales business models to encourage industries to increase the proportion of gas consumption, the report said. "It also aims to significantly increase the proportion of gas in the overall energy mix and accelerate gas replacement for synthetic coal gas and increase gas usage in the transport sectors."

The government will also improve the domestic gas pricing mechanism to align operating costs with consumption and efficient gas utilization but the report did not specify a time frame for nationwide adoption.

Beijing introduced a trial pricing system in Guangdong and Guangxi provinces in December last year, using a basket of high sulfur fuel oil and LPG prices traded in Shanghai in a 60:40 ratio, calculating natural gas prices in both provinces based on 90% of the market price of the basket. In the past, the price was set using a cost-plus method taking into account pipeline and other tariffs.

The report called for the central regions to take advantage of existing major pipelines to increase gas consumption for industrial use instead of coal and oil-fired industrial plants.

Western regions rich in gas resources would also be encouraged to increase gas consumption. Sichuan, Chongqing, Shanxi, Gansu and Xinjiang provinces will further improve their gas grids and increase household connectivity to piped gas networks.

In the northeastern areas, gas from domestic fields will increasingly be supplemented with imported LNG, with consumption rising in the power and transport sectors.

In the first half of this year, total apparent demand for natural gas rose 15.9% year on year to 72.1 billion cu m, the National Development and Reform Commission said Tuesday. Natural gas imports -- comprising LNG and pipeline supply from Central Asia -- surged 44.6% year on year to 19.8 billion cu m, it added. Domestic gas output during the period rose 6.3% year on year to 53.63 billion cu m, according to data released Tuesday by the National Bureau of Statistics.