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April 3, 2019

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As China seeks a future with blue skies, it’s only natural to go gas

As Shanghai strives to become a major global city and a world leader in green energy, natural gas will play an increasingly important role, Mayor Ying Yong said yesterday.

“We will make full use of resources and markets from both abroad and at home to frame a more diverse energy structure,” Ying said on the opening day of the 19th International Conference & Exhibition on Liquefied Natural Gas.

National Energy Administration chief Zhang Jianhua told the conference that China was now one of the most vibrant LNG markets in the world, but said the industry needed to consolidate.

LNG has the potential to become Asia’s dominant energy source as the region moves away from coal, but Zhang and other speakers said the sector must work together to fend off challenges from other fossil fuels and renewables.

“For a long time, LNG was constrained by the high cost of its storage and transport. A global LNG market has yet to form and the pricing mechanism does not reflect fundamentals yet,” Ying said.

“The LNG industry needs to work together to reduce costs and improve its competitiveness against other fuels.”

Mike Wirth, chairman and CEO of Chevron Corporation, one of the world’s largest LNG suppliers, told Shanghai Daily: “LNG will be an important fuel in China as part of its mixed economy growth, We intend to have partnerships and relationships with many people in China and be part of the country’s energy future.

“There is no realistic achievable plan to address the climate change problem that doesn’t involve natural gas.”

Qatar’s energy minister and president and CEO of Qatar Petroleum, Saad Sherida Al-Kaabi, told Shanghai Daily that demand for gas will continue to grow amid rising environmental and climate change concerns and widespread global moves toward more abundant, cleaner and cost-effective fuels.

The tiny Gulf state is the world’s largest exporter of natural gas and has almost 15 percent of the world’s known reserves. The country provides 22 percent of China’s gas imports over the past decade.

China is the world’s second-largest importer of LNG, buying in 53.78 million tons last year for US$26.5 billion — almost double what it paid for 38 million tons in 2017.

Jim Muschalik, manager of global market development at ExxonMobil, told Shanghai Daily China’s policies could be a solid reference for other countries.

“All you have to do is look at China in terms of the success gas can bring to the environment,” said Muschalik. “China has shown great leadership shifting from coal to more gas which brings clearer air and a blue sky.”

The country is also expanding its LNG import and distribution infrastructure.

The ministry of transport plans to quadruple the country’s import capacity from its 21 terminals within the next two decades. The country’s coastal cities are a strong example of growing demand.


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