10.05.2021 Gas: low-carbon economy and Turkmen-Chinese partnership

Gas: low-carbon economy and Turkmen-Chinese partnership

 

Cooperation between Turkmenistan and China in the gas sector is an essential component of the strategic partnership between the two countries. The key areas of cooperation were specified during a telephone conversation held on May 6 between the leaders of the two countries - Gurbanguly Berdimuhamedov and Xi Jinping. The implementation of the agreements achieved earlier was discussed at the meeting between Minister of Foreign Affairs of Turkmenistan Rashid Meredov and Deputy Minister of Foreign Affairs of China Le Yucheng. 

As reported by the Chinese Embassy in Ashgabat, currently more than 10 Chinese oil and gas enterprises operate in our country. China imported almost 300 billion cubic meters of gas from Turkmenistan and firmly retains its position as the largest importer of Turkmen "blue fuel".

According to Forbes, in 2018, Turkmenistan imported 70% of gas to China and has remained the leader in the supply of "blue fuel" to the Celestial Empire. Of 4.685 billion cubic meters of gas supplied to China in January 2021, 2.786 billion cubic meters were Turkmen pipeline gas. The gas compressor station commissioned at the beginning of this year at the Malay field will ensure stable supplies of Turkmen gas to China.

The PRC aims to strengthen cooperation with Turkmenistan in the gas sector that is due to both rapid economic growth and the country's climate commitments. China's economic growth is expected to accelerate in 2021, due to the successful recovery from the COVID-19 pandemic, as well as the growth of industry, production and consumption.

The IMF predicts that China's GDP will grow 8.2% in 2021 as compare to 1.9% in 2020, outpacing global and Asian growth rates by 5.2% and 6.9%, respectively. At the same time, the country is striving to achieve carbon neutrality, which is expected to become the main driver of the long-term development of China's low-carbon energy sector, including natural gas.

Natural gas consumption rapidly grows in China, increasing its share in the primary energy structure. S&P Global Platts Analytics expected Chinese gas demand to reach 360 billion cubic meters in 2021, up 8.4% from an estimated 332 Bcm in 2020. It was at 313 Bcm in 2019. China Petroleum & Chemical, or Sinopec, had a slightly more conservative outlook and expected gas demand at about 340-345 Bcm in 2021, up 6%-8% from an estimated 320 Bcm in 2020, data from its unit Institute of Economic Research showed. China's average annual increase in gas demand is expected to exceed 20 Bcm in the country's 14th Five Year Plan for 2021-2025 and reach 430 Bcm in 2025.

Platts Analytics forecasts that China's natural gas imports, including pipeline gas and LNG, will reach 163 Bcm in 2021, up about 18% year on year. 

CNPC expected China's pipeline gas imports to reach about 100 Bcm by 2025.

 

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