China’s natural gas consumption is projected to rise by 6.5% to 7.7% this year, potentially reaching 425 billion cubic meters, according to Xinhua and data from the National Energy Administration.
Domestic production is expected to meet about half of this demand, with a forecast of 246 billion cubic meters—an increase of 10 billion cubic meters from 2023. Last year, China used 394.5 billion cubic meters of natural gas, a 7.6% increase from 2022, while domestic production hit a record 230 billion cubic meters, a figure set to be surpassed this year.
Production has continued to grow strongly in 2024. In the first half of the year, output increased by 6%, driven by new field start-ups from state companies. Total production reached 123.6 billion cubic meters from January to June. In June alone, production surged by 9.6% compared to June 2023, according to official statistics.
Imports have also risen to meet the increased consumption. In the first half of the year, imports—including pipeline and LNG—grew by 14.3% to 64.65 million tons. This increase was partly due to a drop in gas prices, which made the commodity more affordable for Chinese buyers.
The Asian benchmark LNG prices averaged just over $9 per million British thermal units (MMBtu) in the first quarter of 2024. This contrasts with the average price of $18 per MMBtu in the same period last year, according to Bloomberg estimates.
In response to growing energy demands, China is intensifying efforts to increase domestic energy production and reduce dependence on imports. Earlier this month, the Beijing government established a new umbrella company for this purpose. The new entity includes major oil companies CNPC and Sinopec, along with firms from other sectors such as China Aerospace Science and Industry Corp, steelmaker Baowu, equipment manufacturer Sinomach, and power generator maker Dongfang Electric Group.