A worker at a PetroChina natural gas factory in Suining, Sichuan province. Gas consumption in the nation could rise by 20 percent this year, according to the National Energy Administration. [Photo / China Daily]

The nation set to consume 20% more this year, according to the energy authorities

BEIJING - China's natural gas demand will rise 20 percent in 2011 to 130 billion cubic meters (cu m) and production will increase 16 percent to 110 billion cu m, according to a statement from the National Energy Administration (NEA) on Jan 28.

According to the NEA, China's gas consumption in 2010 was 110 billion cu m, a rise of 20 percent year-on-year. Meanwhile, production was 94.5 billion cu m, a 12 percent increase from 2009.

Wang Siqiang, deputy director at the NEA, said the expansion of the nation's pipeline coverage means that natural gas consumption will keep increasing rapidly in the coming years. In addition to the areas close to production sites for gas, which are traditionally major consumers, other areas, such as Bohai Bay, the Yangtze River and the Pearl River Delta regions, will also become consumers as their economies expand.

"The consumption growth rate will be more than 20 percent in the next 10 years because this is now the peak period for China's urbanization and industrialization," said Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University.

The country's 2011 power demand may rise 9 percent to 4.5 trillion kilowatt-hours, and the power-generating capacity will increase by 80 gigawatts (gW), bringing total capacity to 1,040 gW, according to the NEA.

The increases in generating capacity will result in greater consumption of coal, the country's biggest energy source, which in turn will increase the demand for natural gas.

However, Lin said natural gas, as the major substitute for coal, has an obvious disadvantage as its price is high and will rise further in the future.

"The price of imported natural gas is twice as high as that in the domestic market. Even after the government's price adjustment, it is still 60 to 70 percent higher," Lin said. "Also, I believe the increase in imported natural gas will influence the domestic price, driving it higher," he said.

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"As a clean-energy resource, it will definitely cost more because of the increasing demand," he added.

China imported 9.3 million tons of liquefied natural gas (LNG) in 2010, up 75 percent year-on-year.

Xu Bo, senior analyst at China National Petroleum Corp (CNPC), said the country produced 9 million tons of LNG in 2010 and estimated that 2011 production will reach 19 million tons, according to an interview he gave to Caijing.com.cn.

Lin said that as a supplement to natural gas, imports of LNG may decline if China's natural gas consumption keeps increasing.