China imported nearly 5 billion cubic meters of natural gas in 2009, according to online publication China Petroleum & Chemical Information. Output increased 7.7% in the same period, reaching 83 billion cubic meters, but was still outstripped by consumption, which rose 11.5% to 87.45 billion cubic meters.
China’s natural gas consumption growth has been in the double digits since 2000; the country became a net importer of natural gas in 2008. This demand will likely accelerate the construction of pipelines connecting Central Asia with eastern and southern China. In addition, Iran recently offered China the chance to replace India as a partner in the PEACE natural gas pipeline project. Beijing is keen to sign long-term liquefied natural (LNG) contracts and has plans to expand the LNG storage facilities at its disposal.
The country’s largest natural gas producer, China National Petroleum Company (CNPC), already has plans to increase output from domestic and foreign sources. Companies in joint ventures with CNPC to develop liquefied natural gas facilities, like China Natural Gas (CHNG.NASDAQ), also stand to benefit from rising LNG consumer prices, which are not set by the central government.