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FOCUS
China Strives for Fast & Stable th Gas Development in 13 FiveYear Plan Period “十三五”天然气发展稳中求进 By Carol YANG
D
uring the 13 th Five-Year Plan period (2016-2020), China will further speed up marketization of natural gas when focusing on a fast and stable development of the industry, the nation's new Five-year plan for the natural gas industry showed.
China's supply capacity for natural gas
To actively and steadily promote the industry
the National Development and Reform
of the Institute of International Energy,
Commission (NDRC) and the National Energy
NDRC.
should exceed 360 billion cubic meters, and the proportion of natural gas in the primary energy consumption should increase to 8.3-10 percent by 2020, according to the Five-year plan (2016-2020) released by
Administration on January 19. Comparing with the expected growth rate of 10 percent, the 8.3-10 percent growth target set in the five-year plan is sound, as it has taken industrial situations into a full consideration, said Bai Jun, deputy director
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FOCUS
During the 12 th Five-Year Plan Period,
reach 3 trillion cubic meters, 1 trillion cubic
During the 13 th Five -year Plan period,
China's natural gas industry made great
meters and 420 billion cubic meters during
China decides to transfer more oil and gas
strides, but still encountered with multiple
the 13th Five-year Plan period respectively,
exploration blocks to qualified market
problems such as lack of investment for
which will boost the total proven reserves to
players including pr ivate companies
exploration, low efficiency, monopolized
hit 16 trillion cubic meters, 1.5 trillion cubic
through open and fair ways, and allows
infrastructure and insufficient storage
meters and 1 trillion cubic meters by 2020
blocks transfer among oil companies,
facilities. Moreover, the consumption of
respectively.
aiming to expand investment in oil and gas
natural gas has slowed down since the second half of 2013 due to the slowing economic growth and the oil price slump.
To achieve the goal, China should break the monopoly in the first place. China's oil and gas exploration market has long been
exploration and exploitation and further diversify investment entities in the upstream of the oil and gas industry.
Under the circumstance, insiders believe
closed, compared to the copper ore and iron
Moreover, it will learn from cooperation
a relaxed target will benefit the healthy
ore sectors. Four state-owned oil companies
between oil firms and local authorities as
development of the industry.
- China National Petroleum Corp, China
well as competitive bidding in Xinjiang,
Petrochemical Corp, China National Offshore
Sichuan, Chongqing and the Ordos Basin
Oil Corporation and Yanchang Petroleum
and make further improvement.
To strengthen gas exploration through further opening of exploration rights
Group - are qualified to engage in oil and gas exploration where outsiders can't come in.
The annual output of natural gas hereby is expected to grow by an annual average of 8.9 percent in the coming years to 207
To improve the nation's supply capacity of
In 2015, the Ministry of Land and Resources
billion cubic meters in 2020, which "should
natural gas, the Five-year plan emphasizes
launched bidding for six oil and gas blocks
be used to replace fuel oil in sectors such as
the strengthening of gas exploration and
in Northwestern China's Xinjiang Uygur
automobile and shipping," the NDRC said.
development. Accordingly, China's newly
Autonomous Region to private enterprises,
proven reserves of conventional natural
a move that may end the monopoly of state-
gas, shale gas and coal-bed methane will
owned enterprises in oil and gas exploration.
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To open infrastructures and rationalize gas prices
FOCUS During the 13 th Five -year Plan period,
gas storages is expected to realize a working
Company, and used it as a platform to
PetroChina, Sinopec and CNOOC, who
gas capacity of 14.8 billion cubic meters by
integrate its pipeline business and invite
control most of pipeline networks in China,
2020.
social capital. As a result, the company's
are required to further separate natural government-directed sector reforms and a
To actively push forward mixed ownership reform
move that paves the way for further industry
The plan also pays close attention to the
restructuring.
mixed ownership reform in the oil and
At the same time, China will vigorously
gas sectors. It encourages qualified oil
gas sales and transportation arms, part of
push for ward the accessibility of gas infrastructures for third parties, deregulate non-residential gas prices, improve residential gas pricing, enhance oversight
companies to diversify equities and develop mixed ownership, carry out specialized restructuring in engineering technologies, construction and equipment manufacturing
registered capital increased from 50 million yuan to 80 billion yuan. Through partial opening up of its pipeline business, the establishment of joint ventures, and integration, CNPC achieved a diversified equity ownership structure of the pipeline business. In December 2016, CNPC announced that the mixed ownership reform program has been approved, and an improved final scheme will come into being
to participate in market competition as
in the next step.
independent market entities.
Sinopec also sold its shares of high-quality
a sound price co-movement mechanism
Monopoly in China's oil and gas industry
pipeline assets to attract social capital. In
in upstream, midstream and downstream
often occurs in exploration and exploitation
sectors.
in the upstream and pipeline services in the
and inspection on gas pipeline transmission pricing to lower gas prices, and establish
Major tasks for the industry also include speeding up construction of pipeline networks and developing underground gas storage facilities. China plans to newly
midstream. The introduction of social capital in the upstream and midstream of the oil and gas industry will help improve efficiency, increase domestic oil and gas production
2016, Sinopec sold 50 percent stake of its Sichuan-East Gas Pipeline Co., Ltd., which was acquired by China Life Insurance and SDIC Communication Company with a total of 22.8 billion yuan, of which China Life Insurance holds 43.8 percent of stake while
and improve the marketization of the oil and
the latter holds 6.14 percent.
gas industry.
It is estimated that China's state-owned oil
gas pipeline networks of 104,000 kilometers
As a matter of fact, China's state-owned oil
companies will make more big moves in
with an annual transportation capacity
giants have made attempts. By the end of
of over 400 billion cubic meters by 2020.
December 2015, CNPC established a wholly-
Meanwhile, the construction of underground
owned subsidiar y PetroChina Pipeline
build 40,000 kilometers of natural gas trunk pipelines and branches, and achieve natural
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