How to solve the "gas shortage" in North China and other regions?

"Recently, the heating at home is fine, but the gas for cooking is not enough." On December 7, a Baoding citizen told reporters that this situation started about 10 days ago. I heard that the relevant departments I am getting better, but it seems it will take a month to get better.

Since the beginning of winter, natural gas prices have skyrocketed. LNG (liquefied natural gas) prices have continued to rise to record highs. "Gas shortages" have occurred one after another in North China and other regions. People are asking, what happened to China's energy supply?

Under the crisis, the relevant departments of the central government took heavy action. After the National Development and Reform Commission organized various provinces to hold warning meetings, the Ministry of Environmental Protection recently issued an urgent document stating that "when entering the heating season, all unfinished projects or places , continue to use the past coal-fired heating method or other alternative methods."

At present, the effect of the policy has initially appeared, and the LNG market has begun to cool down slightly. Data from industry organizations show that the national benchmark price of LNG on December 6 was 7,191 yuan/ton, down 0.73%.

Multiple departments have taken heavy action, and natural gas prices have reached an inflection point

On December 7, a letter from the Ministry of Environmental Protection "Please do a good job in the comprehensive management of loose coal to ensure that the people have a warm winter." 》 urgent documents are circulating on the Internet. A reporter from the Beijing News confirmed the authenticity of the document from industry sources.

The document proposes that the first principle is to ensure that people stay warm through the winter, and that during the heating season, all unfinished projects or places will continue to use the past coal-fired heating methods or other alternative methods. Previously, the Beijing-Tianjin-Hebei, Henan, Shandong, Shaanxi and other cities involved in the document were all vigorously promoting coal-to-gas conversion this winter.

This sudden change in the coal-to-gas policy stems from recent changes in the natural gas market.

On December 1, the listed price of liquefied natural gas hit a record high of 9,400 yuan/ton, and the quoter was Heilongjiang Daqing Zhongrui Gas Company. Public data shows that the listing price of Daqing Zhongrui has soared by 1,400 yuan/ton compared with November 30.

According to statistics from Zhuochuang Information, since mid-November, many regions in the country have successively announced gas restriction policies. The gas shortage areas are mainly northern regions such as Shaanxi, Hebei, Shandong, and Henan. Natural gas prices have increased by approximately 10%, with an increase of up to 15% in some areas. In addition, the price of LNG in North China has reached more than 8,000 yuan/ton, an increase of more than 60%, and individual manufacturers have quoted prices as high as 9,400 yuan/ton, a record high. In public media reports, the word "gas shortage" appears frequently.

Looking back at the situation in recent years, it is not the first time that "gas shortage" has appeared.

Just in 2016, due to severe cold weather, Beijing's gas consumption increased sharply, and there was a brief "gas shortage", but in the end there was no danger. However, this time, "Qi Huang" got serious.

At the end of November, Hebei Province decided to activate the province's natural gas demand-side management mechanism and enter the province's Level II natural gas supply early warning state (orange alert) from 0:00 on November 28. The orange alert is a severe tension warning. The supply and demand gap in Hebei Province reaches 10%-20%, which will have a great impact on the normal operation of the economy and society.

It is against the background of tight natural gas supply that the Ministry of Environmental Protection issued the above-mentioned document. In fact, the National Development and Reform Commission and the Ministry of Commerce have also paid close attention to the gas shortage issue recently. Recently, local development and reform commissions have held intensive price warning meetings to try to stabilize the natural gas market.

For example, the official website of the Shanxi government announced that the Provincial Price Supervision Bureau recently held a reminder and warning meeting on LNG price regulations and policies. The meeting reminded and warned all enterprises and relevant social organizations to operate with integrity in accordance with the law, strengthen price self-discipline, and put forward the "Six "Not allowed", such as not fabricating and spreading price increase information, not abusing market dominance, not reaching monopoly agreements, etc.

With the heavy blows of many departments, LNG prices began to fall in response. Zhuochuang data shows that after hitting a high of 7,236 yuan/ton on December 1, LNG prices began to fall slightly. On December 6, the national LNG benchmark price fell to 7,191 yuan/ton.

The sudden increase in coal-to-gas conversion

Behind this gas shortage and national policies, there is a large gap in domestic natural gas supply in the short term.

Data from the National Development and Reform Commission show that national natural gas consumption this year is expected to exceed 230 billion cubic meters, an increase of more than 33 billion cubic meters, a year-on-year increase of 17%. This increase and growth rate is equivalent to more than twice the average annual increase in the previous five years, refreshing the history of my country's natural gas consumption increase, and consumption has shown explosive growth.

According to data reported by the three major oil companies, this year, the country's total natural gas gap will exceed 11.3 billion cubic meters, and the gap will exceed 30 billion cubic meters in 2021. By then, the daily gap may reach 200 million cubic meters during peak gas consumption periods.

Liu Guangbin, an analyst at Zhuochuang Information, believes that the price increase reflects, to a certain extent, the shortage of resources in the domestic natural gas market. The main contradiction in the situation of oversupply is that the upstream supply of natural gas cannot meet the rapidly growing downstream demand. Of course, the current domestic natural gas system and mechanism are not yet perfect, and problems such as vicious competition and monopoly operations occur from time to time. Natural gas supply shortages caused by the game among various stakeholders cannot be ruled out.

PetroChina, the largest domestic natural gas supplier, has already anticipated this gap.

According to data provided by PetroChina, the planned volume to supply Beijing and Hebei Province this winter and next spring is 12.16 billion cubic meters and 5.02 billion cubic meters, an increase of 13.4% and 57.9% respectively. Compared with last year, the supply to Hebei Province increased by 1.84 billion cubic meters, mainly for the conversion of boilers from coal to gas, the transformation of village connectivity, and the commissioning of the ninth phase of Shijiazhuang Thermal Power. The increase in natural gas to Hebei accounts for 55.2% of the overall resource increase in the Beijing-Tianjin-Hebei region.

However, the rapid advancement of "coal-to-gas" has exceeded expectations.

“The planned coal-to-gas conversion can basically be guaranteed by natural gas. What catches people off guard are the sudden increases in coal-to-gas conversion,” PetroChina said in a material sent to reporters Zhong said that this year is the target year of the national "Air Pollution Prevention and Control Action Plan", and various regions have stepped up efforts to "replace coal with gas" to improve the status of clean energy. In order to achieve the above goals, Beijing, Tianjin, Shijiazhuang and other places have stipulated quantitative indicators for coal-to-gas conversion, and the number of coal-to-gas conversions by local governments has already exceeded the quantitative indicators.

In 2017, Hebei Province issued a coal-to-gas plan to convert 1.8 million households from coal to gas and 4,500 tons of boilers from coal to gas. But the actual situation is that 2.6 million households are expected to convert coal to gas, and 11,700 steam tons of boilers will be converted.

Lin Boqiang, Dean of the China Energy Policy Research Institute of Xiamen University, pointed out that the main purpose of promoting "coal-to-gas" is to reduce environmental pollution, which is an inevitable requirement for achieving smog control, clean development, and building a beautiful China. The general direction of "changing coal to gas" is right, but the current shortage of natural gas is a problem that must be overcome.

Industrial users compete with residential users

In addition to the explosive coal-to-gas switch, other industrial users’ “appetite” for natural gas is also rising rapidly, such as industrial fuel and power generation gas. , this year’s year-on-year usage exceeds the sum of the increases in the past three years, and there is a phenomenon of industrial users competing with residential users.

Public information shows that the use of natural gas is mainly concentrated in the four fields of urban gas, power generation, chemical industry and working conditions enterprises. According to data provided by PetroChina, the urban gas industry increased by 13% year-on-year, the power generation industry increased by 28% year-on-year, the fertilizer and chemical industry increased by 25% year-on-year, and the industrial and mining enterprises increased by 21% year-on-year.

Data from the National Development and Reform Commission show that national natural gas consumption this year is expected to exceed 230 billion cubic meters, an increase of more than 33 billion cubic meters, a year-on-year increase of 17%. This increase and growth rate is equivalent to more than twice the average annual increase in the previous five years, refreshing the history of my country's natural gas consumption increase.

The gas shortage has exposed shortcomings in the construction of storage and transportation facilities and equipment (mainly pipelines and gas storages). At present, the effective working gas capacity of my country's underground gas storage is less than 6 billion cubic meters, accounting for only about 3% of the total natural gas consumption. In some countries with large natural gas utilization, this proportion generally reaches more than 12%, such as the United States, which is 16.8%. , Russia 15.8%, Germany 27%, and France nearly 30%.

Many gas fields have entered full-capacity production

The rising prices of natural gas have come one after another, so much so that it is called a gas shortage. Yu Baodong, chairman of Poly GCL Oil and Gas Group, believes that this is mainly due to Affected by factors such as the stabilization and improvement of the macro-economy, low gas prices, increased efforts to prevent and control air pollution, clean heating in the north, and centralized policy support, natural gas consumption has picked up significantly and has grown faster since winter, resulting in a decline in my country's natural gas demand. The growth rate is greater than the growth rate of natural gas supply, resulting in a certain degree of shortage of supply.

Therefore, to maintain the balance between supply and demand and price stability in the natural gas market, an important measure is to increase supply.

Feng Haicheng, an analyst at Zhuochuang, also believes that "while the demand for natural gas consumption remains strong, in order to maintain market balance and stability, increasing supply has become a problem that must be faced and solved."

In a material sent to the Beijing News reporter, PetroChina stated that its storage and LNG tank storage have reached the warning line. In order to ensure the safe operation of the pipeline network and ensure the gas consumption of residents within its jurisdiction, PetroChina has taken a number of measures.

Currently, many gas fields have entered full production. On December 3, the daily natural gas production of Qinghai Oilfield climbed to 18.7 million cubic meters. The three gas fields of Sebei, Dongping and Maxian entered full production 10 days earlier than the same period last year.

The LNG market has become the focus

While accelerating the release of production capacity, the allocation of natural gas across regions has been accelerated.

According to what the reporter learned from industry insiders and oil and gas companies, the current sharp rise in gas prices is mainly concentrated in North China. The southern provinces have a relatively stable market because their heating demand is far less than that of the northern region.

The materials provided by Sinopec, which owns Fuling shale gas and other large gas source bases, to the Beijing News reporter show that it is actively coordinating with other companies to speed up pipeline interconnection and adopt resource exchange, transmission and other means. This means to solve the contradiction between regional supply and demand.

Zuo Chen, an analyst at Jin Lianchuang, said, "The price gap between the north and the south is currently widening, and the gas from the south has reached the southern areas of Henan, Anhui, and Shandong. In the long run, it may constrain the price in the north. Later, the price There may be a decline. But considering that the overall supply and demand are still tight, the overall decline will not be too big."

The acquisition of overseas LNG has also come into public view.

PetroChina stated that on the one hand, it is sending multiple business teams around the world to search for reliable LNG spot resources, and on the other hand, it is actively communicating with resource countries to avoid uncertain risks such as supply reduction, supply suspension, and no need to download. .

“China attaches great importance to the guarantee of natural gas supply and actively supports companies to increase domestic natural gas production while diversifying the import of overseas natural gas resources,” Ministry of Commerce spokesperson Gao Feng said at a press conference on December 7. express.

Due to the current domestic oil and gas regulations, private enterprises are also targeting overseas expansion.

Yu Baodong, chairman of GCL-Poly Oil and Gas Group, said that the basic design of its Ethiopian-Djibouti oil and gas project in East Africa has been completed, and it is expected to be ready for full-scale construction in 2018. “In the near future, Benefiting from the surge in gas prices, negotiations on the long-term sales agreement for the Ethiopia-Djibouti project are progressing smoothly, and a legally binding agreement is expected to be signed in the near future."

A serious "gas shortage" that continues to spread has attracted widespread attention from relevant departments and the market. Since mid-November, many regions in the country have successively announced gas restriction policies, and LNG prices in North China have increased by more than 60%; on December 1, the listing price of LNG hit a record high of 9,400 yuan/ton.

The "gas shortage" and the price rise it brings have also brought new topics and tasks to the market-oriented reform of natural gas prices. What is the cause of this gas shortage? Who benefits from this and who is most adversely affected? What measures can be taken for future natural gas supply to avoid gas shortages such as this?

Gas shortage stems from the imbalance of supply and demand structure

What are the current main supply channels for natural gas/LNG in my country? What has the supply and demand structure been like in recent years?

Liu Guangbin: There are two main supply channels for domestic natural gas: one is domestic production, and the other is imported from abroad. From January to October 2017, my country's natural gas production was 121.2 billion cubic meters, a year-on-year increase of 11.2%; natural gas imports were 72.2 billion cubic meters, an increase of 27.5%; natural gas consumption was 186.5 billion cubic meters, an increase of 18.7%. On the natural gas supply side, the overall growth in 2017 was obvious.

Even so, in the face of rapidly growing downstream demand, especially with the advent of the winter heating season, the domestic natural gas market is clearly in short supply. PetroChina estimates that throughout the winter heating period, the northern resource supply gap will be approximately 4.8 billion cubic meters.

Yu Baodong: At present, the main supply channels of natural gas in my country are divided into two types: domestic gas and imported gas. Domestic gas has gradually formed a conventional and unconventional diversified gas supply situation, and imported gas has formed a multi-channel supply pattern of pipeline gas and LNG, with more than 10 resource importing countries. In recent years, as my country's dependence on foreign natural gas continues to increase, the proportion of imported gas has gradually increased.

In terms of supply and demand structure, my country began to import LNG in 2006, and began to import Central Asian pipeline gas at the end of 2009. In 2013, the China-Myanmar natural gas pipeline was completed and put into operation, marking the northwest and southwest imported natural gas pipelines and offshore LNG import channels. Initial formation. Overall, the current domestic natural gas supply is dominated by pipeline gas.

Is this year’s gas shortage an inevitable result of this supply and demand structure to some extent?

Liu Guangbin: At present, there are no new import pipelines put into operation in China, and there are not many LNG receiving stations. The short-term growth potential of natural gas resource extraction is limited. In addition, the construction of gas storage and peak-shaving facilities is insufficient, and the degree of pipeline network connectivity is limited. In addition, due to the small scale of construction and the large growth rate of downstream demand, it is inevitable that there will be a supply gap in the natural gas market.

Yu Baodong: With the vigorous promotion of my country's clean energy policy, the proportion of natural gas in primary energy continues to grow. The golden decade for the development of the domestic natural gas industry has arrived. We expect that natural gas will grow by 2020. Later, it gradually changed to supply exceeding demand.

Downstream end users have been greatly affected

The current "gas shortage" is particularly serious in North China. Who are the main suppliers of the natural gas market in North China?

Yu Baodong: In the natural gas market in North China, the main suppliers are three barrels of oil. In addition to three barrels of oil, there are also many second-tier companies, such as Beijing Energy, Beijing Gas, Xinao and other companies. Currently, the country is pushing for the access of infrastructure (LNG receiving stations and long-distance pipeline networks) to third parties. In order to make up for the inherent disadvantage of lack of upstream resources, second-tier companies are actively participating in the three-barrel oil mixed ownership reform and are seizing the ground in the infrastructure field. Set up points.

Liu Guangbin: The main area for natural gas heating in winter is North China. The main gas suppliers are PetroChina, Sinopec and CNOOC, among which PetroChina’s West-East Gas Transmission and the Shaanxi-Beijing System are the main gas sources.

As gas prices rise, which types of companies benefit from the gas shortage, and which types of companies suffer greater negative impacts?

Liu Guangbin: The rapid growth of natural gas demand during the year has largely stimulated the upstream production of various suppliers to increase production and efficiency. At the same time, the rise in natural gas prices has guaranteed the profits of these companies to a certain extent. As for the downstream terminals, first of all, the cost has risen due to price increases; in addition, during the peak period of heating gas consumption in winter, the industrial and commercial sectors in some areas have restricted gas use, resulting in insufficient natural gas supply.

Yu Baodong: As gas prices rise, we believe that due to the tightening supply and demand situation, suppliers will benefit from the gas shortage, and downstream end users will be negatively impacted. If gas prices rise too much, Soon, there may even be the possibility of reverse substitution of coal to gas or electricity instead of gas.

As a large domestic energy company, how will GCL be affected?

Yu Baodong: Recently, benefiting from the surge in gas prices, the long-term sales agreement negotiations for GCL’s Ethiopia-Djibouti project are progressing smoothly, and a legally binding HOA is expected to be signed in the near future. . But this is a double-edged sword. The cost pressure on GCL’s domestic natural gas power plants will increase.

Accelerate the construction of gas storage and peaking facilities

How to solve the recent gas shortage problem in the short term?

Liu Guangbin: In the short term, the construction progress of Sinopec Tianjin LNG receiving station should be accelerated to quickly put into production and gas intake; in addition, the interconnection of natural gas pipeline networks should be promoted to rationally allocate natural gas resources from north to south and east to west. Furthermore, the problem of natural gas supply restrictions in Central Asia must be resolved as soon as possible to ensure the supply of gas from this main channel.

Yu Baodong: In the short term, the government can use comprehensive policy measures to solve the supply shortage problem. First, further promote the market-oriented reform of prices, design appropriate market incentive mechanisms, and increase the enthusiasm of the supply side; second, from the perspective of haze control, increase subsidies for "coal to gas", and when necessary, A certain level of industrial gas use can be sacrificed to meet residential needs.

How to solve the problem of gas shortage in the medium to long term?

Yu Baodong: For the medium and long term, it is recommended to increase the reform of the oil and gas industry, increase the construction of reserve facilities and pipelines, accelerate the promotion of third-party industry access mechanisms, and jointly participate in the national Energy security. Regarding the natural gas price formation mechanism, it is recommended to adhere to the reform line of "letting go of both ends and controlling the middle". This will enable market participants to conduct fair pricing in a fully competitive environment, give full play to the role of market regulation, and be conducive to the health of the natural gas industry. develop.

Liu Guangbin: In the future, the construction of gas storage and peaking facilities should be actively accelerated. The construction of gas storages, especially strategic gas storages, should be put on the agenda as soon as possible. Major natural gas consuming areas, especially during the seasons, should In northern heating areas with large peak-valley differences, the construction of natural gas reserve stations should be improved as soon as possible. In addition, we will actively promote the reform of the natural gas market mechanism and improve the natural gas market mechanism including pricing mechanism and pipeline transportation system.

The south is better and warmer.