China is aggressively developing its gas reserves and will be less reliant on gas imports in future. As the biggest consumer of natural gas, this will lead to a declining demand of global natural gas imports.
The news comes as a disappointment to international energy companies that are looking to China to grow their LNG business such as British Gas, Royal Dutch Shell, BP and ExxonMobil. Currently, China’s imports of LNG continue on its strong growth. Imports are up 27 per cent in June 2010 from the same month in 2009.
China is also exploring different sources for producing LNG such as shale gas and gas from coal. This will cut its dependence on tanker-delivered LNG. According to industry consultant, Wood Mackenzie, China’s demand for LNG will be halved from 16 million tonnes a year in the coming decade to eight million tonnes a year from 2020.
International firms with expertise in shale gas and alternative energy sources may benefit from China’s decision. China will require consultation, partnerships and technological skills in the initial development phase. This will open a window of opportunity for experienced and qualified foreign players.
