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Journal of Australian Energy Producers
RESEARCH ARTICLE (Non peer reviewed)

China’s demand for natural gas: drivers and prospects

J. Liu
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Bureau of Resources and Energy Economics (BREE).

The APPEA Journal 52(2) 645-645 https://doi.org/10.1071/AJ11059
Published: 2012

Abstract

Sustained economic growth in China has triggered a surge of energy and mineral consumption and imports, including natural gas. This study presents recent trends in China’s demand for natural gas in a global context and discusses its drivers and prospects. In the past decade, drivers of China’s demand for natural gas are mainly associated with its rapid economic growth, path of industrialisation and urbanisation.

With more than 1.3 billion people and a rapidly rising income level, China’s demand for energy has surged. It is increasingly difficult for domestic production capacity to supply all of this demand, especially when China’s limited domestic reserves are considered. The prospect of potential growth in natural gas consumption and imports is expected not only due to China’s economic growth, but also a policy imperative (e.g. the 12th Five Year Plan) to increase the share of clean energy sources such as gas and efficient fuels in the energy supply mix, as well as improving energy intensity and other factors that will influence energy sector outcomes.

It also establishes that LNG, in addition to pipeline supplied gas, is likely to be an important source of energy in China in the coming decade; therefore, due to rebalancing its energy mix and increasing the share of non-coal energy sources in China’s energy market, it is anticipated that China will be more dependent on overseas supply of natural gas to fill the gap between domestic production and consumption.

Jin Liu is a senior economist and theme leader of macro and market analysis at BREE.

She has a master’s degree in economics from ANU. Since 1999, she has held an executive position at various Commonwealth departments: the Department of the Treasury; the Department of Education, Sciences and Training; and, the Department of Transport and Infrastructure.

Prior to joining public service in 1997, she worked at ANU and the Chinese Academy of Social Sciences in Beijing, China.

Macro and markets analysis at BREE provides high-level and professional analysis of the synergy between macro dynamics and market activities relating to resources and energy commodity, and economic and technological factors that affect mining and energy sectors.

Macro and markets analysis also aims to provide market-wide view of global geographic opportunities and to identify their determinants, prospects, and areas in that market where emerging locations will thrive.


References

GTEM is a multi-region, multi-sector, dynamic general equilibrium model of the world economy. The capacity of GTEM to provide commodity demand is derived not only by interactions among sectors within an economy as well as the bilateral trade flows among various world economies, but also capture impacts of climate change policies.


References

GTEM is a multi-region, multi-sector, dynamic general equilibrium model of the world economy. The capacity of GTEM to provide commodity demand is derived not only by interactions among sectors within an economy as well as the bilateral trade flows among various world economies, but also capture impacts of climate change policies.