CNPC cuts forecast for Chinese gas demand amid economic slowdown

By ELENA MAZNEVA
Bloomberg

China may consume less natural gas by 2020 than previously estimated, partly because of a slowdown in the world’s second-biggest economy, said a China National Petroleum Corp. research body.

CNPC’s Economics and Technology Research Institute lowered China’s natural gas demand forecast to 269 billion cubic meters in its worst-case outlook through the end of the decade, according to a presentation Wednesday by Wang Zhen, deputy director general at CNPC’s policy research office. The institute previously estimated that China would consume about 300 billion cubic meters of the fuel by 2020.

“They adjusted their estimates based on the economic situation,” Wang told reporters at a conference in Yuzhno-Sakhalinsk in Russia. “I’m more optimistic, my personal opinion is at least 330 billion cubic meters by 2020.”

The institute’s “high case” scenario puts 2020 gas consumption at 333.7 billion cubic meters. The demand boost may come from China’s need to cut coal consumption after the country signed an agreement with the US on climate and emissions, Wang said.

China has lowered its forecast for gas demand previously. Last year, the government estimated gas consumption at more than 360 billion cubic meters by 2020, down from 400 billion cubic meters.

Russian Supply

Russia’s plan to supply 100 billion cubic meters of natural gas annually to China is “possible” as the country seeks to diversify its sources of supply and its market is large, Wang said.

Russian President Vladimir Putin signed a gas-supply deal with China last May after almost a decade of talks amid souring relations with Europe and the US because of the conflict in Ukraine.

Russia, the world’s largest natural gas exporter, sees supply negotiations with China unaffected by falling demand in the Asian nation and the slump in commodity prices, Alexander Medvedev, Gazprom’s deputy head, said in an interview on Tuesday. The outcome depends on price, Wang said.

Seperately, CNPC is interested in investing in Russian exploration assets and talks on joining Rosneft OAO’s Vankor oil project are continuing, Wang said.

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