Reliance on foreign natural gas rises

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China's natural gas imports in May jumped a year-on-year 26.9 percent to 648,540 tons in order to meet the country's energy-saving goals, Customs said Tuesday.

"The Chinese government will increase natural gas imports in order to promote the 11th Five- Year Plan (2006-10)," said Shi Dan, professor at the Institute of Industrial Economics of the Chinese Academy of Social Sciences (CASS).

According to the 11th Five-Year Plan (2006- 10), China will cut its per unit of GDP energy consumption by 20 percent from 2005 levels by the end of 2010.

"Natural gas consumption is expected to account for 8 percent in total energy consumption in the country during the 12th Five-Year Plan (2010-15)," said Wu Yin, vice president of the National Energy Administration.

That goal may be hard to reach given the country's current energy consumption breakdown. China's current natural gas consumption only accounts for about 4 percent of the country's total energy consumption, whereas the global standard is 24.1 percent.

Natural gas, unlike petrol and coal, is often described as the cleanest fossil fuel, producing less carbon dioxide, and far smaller amounts of sulfur dioxide and nitrous oxides.

Data from the National Bureau of Statistics (NBS) shows natural gas output reached 31.89 billion cubic meters in the first four months of 2010, a 13.1 percent increase from 2009.

Analysts believe that the figure of natural gas output and imports will surge in the coming years along with greater exploration efforts and increasing overseas purchase deals.

In addition to the natural gas, Customs also released China's crude oil imports in May, which rose 4.4 percent to 17.84 million tons compared to the same time last year to meet the country's surging demand.

"Less dependence on oil and more reliance on overseas natural gas will push China to speed up energy efficiency projects," said Tang Dechao, director with the Shanghai Pacific Energy Center.

"The fast growth of natural gas imports was mostly caused by the massive domestic demand," said CASS's Shi. "Imports increase especially when the international price is relatively low."

The National Development and Reform Commission announced a 25 percent increase in domestic natural gas prices earlier this month, a move to encourage oil giants to sell more of the clean fuel. The domestic prices are to increase 0.23 yuan ($0.03) per cubic meter, which would add an average of 4.6 yuan ($0.67) to residents' monthly household budgets.

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