CNPC's Natural Gas Production Growth Slows in 2011

After experiencing a period of rapid growth in natural gas production, China National Petroleum Corporation's domestic natural gas production has shown signs of slowing.

The CNPC website said yesterday that CNPC completed a total of 75.5 billion cubic meters of natural gas in 2011, an increase of 3 billion cubic meters. At present, CNPC's natural gas production accounts for nearly 80% of the total domestic production.

The article points out that in recent years, CNPC has used natural gas as a strategic and growth project, its annual natural gas production has increased from 18.3 billion cubic meters a decade ago to the current 75.5 billion cubic meters, and the proportion of natural gas in oil and gas has risen from 12.4% to the present. 35.9%. Changqing, Tarim, and the Southwest's three 10-billion cubic meters of atmospheric area are the main forces for natural gas production.

Based on the above data, it can be concluded that CNPC’s natural gas production in 2011 increased by approximately 4.1% year-on-year. The data released by the National Development and Reform Commission recently showed that from January to November 2011, China produced a total of 91.4 billion cubic meters of natural gas, an increase of 6.0% year-on-year. In other words, CNPC’s natural gas production growth in 2011 was lower than the national overall rate.

In fact, the growth rate of CNG's natural gas sales has been slowing year by year in recent years. PetroChina’s financial report shows that CNPC’s natural gas sales volume was 63.011 billion cubic meters in 2010, a year-on-year increase of 5.7%; in 2009, its natural gas sales volume was 59.614 billion cubic meters, a year-on-year increase of 16.8%; in 2008, its natural gas sales volume was 510.54 billion cubic meters. , a year-on-year increase of 17.2%.

"In the next few years, with the sustained development of Sinopec and CNOOC in the natural gas sector, the market share of these two companies will continue to increase, and PetroChina's share of the national natural gas market will decline." Ren Haoning, researcher of China Investment Advisor Energy Industry, said: The proportion of CNPC’s own natural gas and imported natural gas will also change. In 2012, CNPC’s natural gas imports will increase significantly, resulting in a rapid increase in the total amount of natural gas imported by CNPC, which will continue to increase its share of natural gas sales.

In the above article, PetroChina also pointed out that the natural gas business has become its new economic growth point and benefit contribution point. In response, Ren Haoning said that during the “12th Five-Year Plan” period, the domestic natural gas consumption scale will expand rapidly, and the proportion of natural gas in CNPC’s oil and gas equivalent will continue to rise. It is estimated that the proportion of natural gas may rise to about 45%.

However, due to the inversion of imported natural gas prices, it may be difficult for China National Petroleum's natural gas sales growth to increase its profitability. “At present, the loss of natural gas imported by CNPC is more than RMB 1 per cubic meter. It is expected that CNPC’s loss of imported natural gas will exceed RMB 20 billion in 2011.” Ren Haoning said that the recent implementation of natural gas price reforms can gradually reduce the total loss, but the reform may be short-term. It is still limited to the Guangdong and Guangxi regions, and it is difficult to fundamentally solve the problem of the loss of the oil and gas sector.