China to Need Gas from Both Turkmenistan and Russia

May 12, 2015

China’s growing demand will need natural gas from both Turkmenistan and Russia, Tao Wang, expert at Carnegie-Tsinghua Center for Global Policy believes.

“China’s energy transition and economy will see natural gas demand increasing quickly in the coming decades, possibly double the demand of today by 2030,” Wang told Trend.

“Surely China will need different sources of gas imports to ensure the security of supply and economic benefits, including pipeline gas from Central Asia and Russia, and also LNG imports from other sources,” Wang said.

He added that China, just as the other East Asian gas importers such as Japan and South Korea, would always prefer reliable and affordable natural gas supplies.

With regard to the Russian gas, which is expected to be transported to China through the “Power of Siberia”pipeline, which is already being constructed, Wang believes that, given the location, the pipeline will certainly have more advantages in accessing the northern market of China.

China is the world's most populous country with a fast-growing economy that has led it to be the largest energy consumer and producer in the world. Robust growth in natural gas demand in recent years, particularly in the urban coastal areas, has led China to become the third largest LNG importer and to accelerate development of its LNG and pipeline infrastructure, according the US Energy Information Administration (EIA).

According to BP, consumption of natural gas in China in 2013 amounted to 161.6 billion cubic meters, which was 10.8 percent more than in 2012.

Currently China is the biggest importer of Turkmen gas. In 2014, Ashgabat exported 25.9 bcm to China. By 2017, the capacity of the system from Turkmenistan to China is expected to increase to 80 bcm of gas, and by the end of 2021, Turkmenistan will annually supply 65 billion cubic meters of gas under the agreement signed between China National Petroleum Corporation (CNPC) and Turkmengaz.

It is reported that the capacity of the first two lines of the pipeline amounted to 30 billion cubic meters of gas at the end of 2010. The construction of the third line with capacity of 25 billion cubic meters of gas per year was completed at the end of 2014. As of 2015, the capacity of the pipeline from Turkmenistan to China is 55 billion cubic meters per year.

At the same time, according to the recent Russian Gazprom’s statement, the company intends to pursue a Eurasian strategy instead of the European one, and in case if Europe refuses Russian gas, it can be redirected to Asia. The company has already started construction of the "Power of Siberia" gas pipeline from eastern Siberia to China. The first supplies via the pipeline are scheduled for 2018. Gazprom is set to export 38 billion cubic meters of Russian gas to China annually over a 30-year period.

By Aygun Badalova – Trend

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