Central Asia supplies close to half of Chinese gas imports in 2013

By bne IntelliNews June 18, 2014

bne -

 

Central Asia is now supplying nearly half of China's needs for imported gas, with the majority sourced from Turkmenistan, according to a new report from BP. However, Beijing continues pushing to raise its imports from the region.

Turkmenistan supplied 24.4bn cubic metres (cm) of gas to the world's largest energy consumer in 2013. Uzbekistan delivered 2.9bn cm but Kazakhstan managed just 0.1bn cm, according to the BP Statistical Review of World Energy 2014. The news comes just days after China inaugurated a third line of the Central Asia-China gas pipeline.

China also imported 24.5m tonnes of liquefied natural gas last year, which translates as 33.81bn cm. However, gas supplies by ship from suppliers such as Brazil, Australia and Indonesia are seen as an increased risk to energy security on the back of an increase in tension with neighbours and the West in the South China Sea.

The figures show Central Asia accounted for 45% of China's gas imports in 2013. However, it wants more gas from the region, and on June 15 inaugurated a Line C of the Central Asia-China gas pipeline. Running from Turkmenistan through Uzbekistan and Kazakhstan to China's western Xinjiang Uyghur Autonomous Region it will eventually carry 25bn cm. A fourth line with similar capacity is due to see construction start later this year.

Turkmenistan and Uzbekistan are reported to be pumping 30bn cm of gas per year into the 1,833km Lines A and B, which were completed in 2009 and 2010 respectively. They are due to pump 10bn cm each into Line C, with Kazakhstan contributing 5bn cm. The new line will increase the total capacity of the pipeline to 55bn cm per year.

Thirsty

That leaves Beijing to help the countries of Central Asia boost production. According to BP, Turkmenistan's gas output rose by a meagre 0.4% to 62.3bn cm last year. Kazakhstan managed 0.8% to 18.5bn cm, while Uzbekistan saw production fall by 2.8% to 55.2bn cm.

In May, Turkmenistan commissioned a gas-processing facility with a capacity of 9bn cm at the Bagtyyarlyk field. He also launched the construction of a gas-processing plant with a capacity of 30bn cm at the giant Galkynysh field. Overall, Ashgabat has agreed to increase gas supplies to China to 65bn cm by 2020.

Beijing needs all it can get. China accounts for 22.4% of the world’s total energy consumption and 49% of net global growth. While consumption rose 4.7% in 2013 that was well below the ten year average of 8.6%. By volume, it added more in 2013 than Australia's total energy demand (116m tonnes of oil equivalent), the report points out.

On top of that, at 67.5% of its energy mix, coal remains the dominant source. While gas has doubled its share of consumption over the past decade, it still only came to 5.1% in 2013. That does little to stem the chronic pollution that stalks the country's urban centers, and is seen as a potential source of social unrest.

Therefore it's looking to expand gas use. Last month it signed a $400bn deal to import 38bn cm per year from Russia, after over a decade of haggling. However, Central Asia - where it has found much success in using its large cash reserves to gain influence - remains central to its strategy. Gas consumption saw the strongest growth of any fossil fuel last year at 10.8%.

In 2013 China consumed 170bcm of natural gas, and expects to need up to 250bcm in 2015, according to the government. That's a cumulative increase over five years of 19% a year, if the economic growth targets are met. By 2020, China should be consuming 420bcm in total, of which 120bcm needs to be imported.

Related Articles

Drum rolls in the great disappearing act of Russia's banks

Jason Corcoran in Moscow - Russian banks are disappearing at the fastest rate ever as the country's deepening recession makes it easier for the central bank to expose money laundering, dodgy lending ... more

Kremlin: No evidence in Olympic doping allegations against Russia

bne IntelliNews - The Kremlin supported by national sports authorities has brushed aside "groundless" allegations of a mass doping scam involving Russian athletes after the World Anti-Doping Agency ... more

PROFILE: Day of reckoning comes for eccentric owner of Russian bank Uralsib

Jason Corcoran in Moscow - Revelations and mysticism may have been the stock-in-trade of Nikolai Tsvetkov’s management style, but ultimately they didn’t help him to hold on to his ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss