The Research Institute of Economics and Technology of China Petrochemical Corporation (Sinopec) has prepared the China Energy Industry Development Forecast to 2060 (2024 Edition).

Under the «basic» scenario, China’s natural gas demand will peak in 2040 at 610 billion cubic meters. The share of natural gas in energy balance at peak of demand will make 13%. The peak of production of natural gas is also expected in 2040 at the level of 310 billion cubic meters. Thus, according to calculations of the Chinese experts, import of natural gas by 2040 can make 300 billion cubic meters. Experts of institute allow a possibility of input of the line D of the Central Asia — China gas transmission system after 2028, and also the beginning of import of natural gas from Russia through the territory of Mongolia of 50 billion cubic meters after 2030. It is expected that to 2040 and 2060 rated capacities of gas generation will make 276 and 350 GW respectively. In transport sector a share of natural gas will be stable at the level of 3.5-5%, thus experts expect that in this segment the main demand for natural gas will fall on cargo transport on LNG which quantity will already be in the short term equal to number of diesel vehicles. As for hydrogen fuels, this is expected to grow from 35.5 million tones/year in 2023 to 85.8 million tones/year in 2060. Significant growth in a share of «green» hydrogen is expected after 2030, and by 2040 its share will already exceed 50% (more than 25 million tons). Transport and industrial sectors will be main «driver» of increase in demand for hydrogen.

In 2023 consumption of natural gas in China made 394.5 billion cubic meters, gas production is 229.7 billion cubic meters, gas import – 166.2 billion cubic meters. Thus, proceeding from the forecast of Scientific Research Institute of Economy and Technologies Sinopec, by 2040 consumption of natural gas in China can increase by 215 billion cubic meters, gas production — by 80 billion cubic meters, gas import — by 133.5 billion cubic meters. The basic scenario of Sinopec on development of gas industry of China is similar to the most actual forecast of Institute of Economy and technologies the KNNK, which makes 605 billion cubic meters by 2040. Chinese consulting «SIA energy» looks at prospects of development of demand for gas in China more optimistically: by its calculations, by 2040 demand for gas in the country will make nearly 670 billion cubic meters.

The ministry of natural resources of the People’s Republic of China in April, 2024 published the report Natural resources of China — 2023. In the report it is specified that last year the volume of the reconnoitered technically taken reserves of traditional natural gas in China grew by 415.5 billion cubic meters and made 6683 billion cubic meters. Technically taken reserves of slate gas for the end of 2023 made 551.6 billion cubic meters, the methane of coal layers (MCL) – 534.8 billion cubic meters. The main volumes of new reserves of natural gas were reconnoitered in the territory of Ordossky, Sichuan and Tarimsky pools, methane of coal layers — in the territory of Ordossky pool.

In China reserves of natural gas share on some categories, including «geological stocks», «technically taken stocks» and «stocks which production is economically profitable». The last some years are published data on «technically taken stocks». In the report for 2022 technically taken reserves of traditional natural gas made 6 339 billion cubic meters, slate gas — 365,9 billion cubic meters and methane of coal layers — 544 billion cubic meters. Data on the volume of stocks which development is economically profitable, last time were officially published in 2018 when the ministry estimated them at the level of 3 900 billion cubic meters. By estimates of the Chinese experts, over time the increasing role in ensuring production of supply of natural gas due to own production in China will be played by development of slate gas. At the same time, now development of branch does not meet initial expectations, and achievement of target indicators on production of slate gas to 2025 and 2030 seems difficult. In addition to geological difficulties, insufficient technological development, regular accidents and gradual reduction of subsidies the main challenge for shale gas companies is the low economic profitability of projects

Korea and Vietnam

Growth of consumption of gas is expected also in South Korea and Vietnam. At the end of April the first LNG party is delivered to the regasification terminal Korea Energy. The gas will be used for pre-commissioning activities. Once the terminal is commissioned, the natural gas shipped through the terminal will be utilized in the nearby combined cycle power plant, as well as for the industrial sector of Ulsan and for the development of LNG bunkering.

The Korea Energy LNG terminal belongs to the private company SK Gas and the state Korean national oil corporation. It is the first in South Korea terminal on simultaneous reception of LNG and oil products, the capacity of the first stage of the terminal makes 1 million tons LNG/year. Construction of the terminal has been under construction since 2020, with official commissioning scheduled for July 2024. Now in the Republic of Korea 7 LNG terminals (not including the Korea Energy terminal) with a cumulative capacity of 146,1 million tones/year operate, including 5 terminals belong Kogas, 2 more — to the private companies. SK Gas is included into SK Groups Corporation, which is the large private importer of LNG to South Korea. The SK Groups Corporation possesses 5 gas power plants. In 2024 it plans to put in Ulsan into operation first-ever thermal power plant of the combined cycle that can use natural gas and liquid carbon dioxide as fuel.

Energy market reform is ongoing in Vietnam, aimed at, inter alia, to reduce the share of coal in generation. The country’s government has submitted two new draft laws on the development of power plants fuelled by domestically produced natural gas and imported LNG, and on the direct purchase of electricity from renewable generation facilities. In the new bill it is offered to allow increasing price of electricity depending on gas cost. For new gas-fired power plants it is proposed to guarantee a minimum power withdrawal of 70 per cent under long-term contracts until 2030, which will allow recouping investments in the projects. The mechanism of distribution of gas from key internal gas projects, including Kavoysan and Block B, will be defined by the ministry of the industry and trade later. The new bill also now allows large electricity consumers to enter into direct power purchase agreements with renewable energy generation projects from renewable energy generation projects. Previously, it was only allowed to buy electricity from the state-owned power grid monopoly. Low internal gas prices constrained development of the Vietnamese gas market. An opportunity to coordinate the internal prices with world will allow increasing gas consumption.