China Pushes for More Gas Shortage Capacity to Alleviate Shortages

11 June 2018: 

China’s government is encouraging domestic producers and city-gas distributors to increase their storage capacity as gas demand grows at a double-digit pace after supply shortages last winter.

According to the National Development and Reform Commission (NRDC), China’s gas storage capacity of 7.2 Bcm was unable to meet peak demand of 235 Bcm in 2017. The government has requested all gas suppliers to ensure by 2020 that they hold gas inventories equal to at least 5% of their annual sales targets, a development that is shaping up to be China’s strategic gas reserves.

During past winters, only large state-owned companies had to store a minimum amount of gas – enough to meet only a few days of winter demand. Due to the lack of underground gas storage facilities, gas distributors with stakes in LNG receiving terminals would have to keep inventories in LNG tanks to count toward the storage target.

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