Energy

Natural gas stockpiles crucial to energy security

By Zhou Yan (China Daily)
Updated: 2011-02-23 09:42

Natural gas tanks in Puyang, Henan province. Emergency natural-gas strategic reserves should be built in the coming years, a senior energy policy adviser says. [Photo / China Daily]

BEIJING - China must devise an emergency natural-gas storage plan during the 12th Five-Year Plan period (2011-2015) to prepare for the possibility of an abrupt shortage caused by natural disasters and unrest overseas, said a senior researcher at the country's energy think tank.

"A plan for emergency gas-stockpiling must be a top priority in the next five years. It is necessary for safeguarding national energy security," Li Junfeng, deputy director of the Energy Research Institute, told China Daily.

The organization is affiliated with the National Development and Reform Commission (NDRC), China's top economic planner.

Li said that unlike an emergency crude oil stockpiles, gas storage facilities must initially be built in every first-tier city, at least, and then in lower-tier areas. "So far, the country has no such reserves. We hope a plan can be drawn up in the next few years," he said.

China finished building the first phase of a crude-oil strategic reserve base in 2009 and is now building the second phase, which will have eight sites across the country.

The nation's combined crude-oil storage capacity for strategic stockpiling and commercial inventory reached 346 million barrels by the end of 2010, equal to about 36 days of domestic demand, according to a report issued by the China Petroleum and Chemical Industry Federation.

But emergency gas inventories are far more crucial at this moment, Li said.

Natural gas is more important in everyday life than oil, and the government must set up such storage sites to deal with unexpected demand surges caused by weather, transportation, and uncertainties in overseas markets, he said.

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Emergency storage capacity for the fuel need not exceed a 30-day supply for domestic consumption and would serve for emergency use only.

Residential natural gas consumption rose to 43 percent of the total demand in 2009, from 18 percent in 2000, according to the Research Institute of Economics & Technology under China National Petroleum Corporation, the country's largest energy producer by volume.

"The number of residential users of gas will see a large-scale increase as a result of the completion of local gas pipelines. Natural gas will become the main type of fuel for city dwellers," said Duan Zhaofang, of the research institute.