Households get guarantee of gas supplies as shortages hit
By Jim Bai and Tom Miles |
November 25, 2009, Wednesday
|
Print Edition
Print Edition
CHINA'S energy firms are reducing gas supplies to industry to avoid having to cut off households this winter, but risking more factory shutdowns, dampening production and raising costs as shortages may worsen.
The shortfalls began this month when heavy snow hit north China, spiking up heating demand and forcing PetroChina to divert south China's supplies north. The cold spell then hit the south, adding to demand and slowing supplies.
PetroChina, the country's leading gas supplier, yesterday said it would make a second cut of 3 million cubic meters in the daily amount it delivers to industrial users in north China, reducing their volumes by another 10 percent.
PetroChina has also cut 3 million cubic meters per day, or 8 percent, from supplies to firms in the Yangtze River Delta region and Hunan and Hubei provinces, as well as trimming flows to industries in the southwest and northwest, the main gas producing regions.
As demand peaks in December and January, daily gas shortages are expected to reach 8 million cubic meters in north China and 5-6 million cubic meters per day in the south, China Petroleum Daily said yesterday.
"Gas for household needs and for heating can be guaranteed in the winter and spring by further reducing supplies to industrial users," Lin Changhai, general manager of PetroChina's gas sales unit in northern China, was quoted as saying.
In southwestern Chongqing, taxis lined up for compressed natural gas as the sudden drop in temperatures slowed pipeline flows, lengthening refuelling time. Many were reluctant to shift to gasoline, which costs three times as much.
Gas supplies for taxis in Wuhan, Hubei Province, were halted from November 16, forcing the local government to pay subsidies to taxi drivers who switched to gasoline.
Scores of firms in Hangzhou, Zhejiang Province, were shut because of gas shortages, while hundreds of buses in Zhengzhou, Henan Province, faced being grounded.
"We had to switch to diesel in two of our plants," said Xu Jianyun, a manager of a tire maker in Hangzhou. "We still see a lot of uncertainties in gas supply for the coming months and will stick to diesel."
PetroChina and Sinopec, the No. 2 gas producer, also curbed consumption by their own units. "We were using LPG to fill the natural gas gap, so our production was not affected," said an official at Sinopec's Qilu refinery, where supplies were cut by 200,000 cubic metres a day.
Gas supplies to PetroChina's Lanzhou refinery were also cut by 200,000 cubic metres to about 900,000 cubic metres a day.
The National Development and Reform Commission, China's economic planning agency, has said tight gas supplies are gradually easing thanks to coordinated efforts by the government and major gas producers.
Sinopec's fourth-quarter daily production is at a record of 23.8 million cubic meters on average, up 1.8 million cubic meters versus the third quarter, the firm said yesterday. It curbed supply to its own refineries by at least 450,000 cubic meters a day.
PetroChina was also pumping at maximum rates, raising its daily output to nearly 200 million cubic meters from 169 million cubic meters in early November.
The shortfalls began this month when heavy snow hit north China, spiking up heating demand and forcing PetroChina to divert south China's supplies north. The cold spell then hit the south, adding to demand and slowing supplies.
PetroChina, the country's leading gas supplier, yesterday said it would make a second cut of 3 million cubic meters in the daily amount it delivers to industrial users in north China, reducing their volumes by another 10 percent.
PetroChina has also cut 3 million cubic meters per day, or 8 percent, from supplies to firms in the Yangtze River Delta region and Hunan and Hubei provinces, as well as trimming flows to industries in the southwest and northwest, the main gas producing regions.
As demand peaks in December and January, daily gas shortages are expected to reach 8 million cubic meters in north China and 5-6 million cubic meters per day in the south, China Petroleum Daily said yesterday.
"Gas for household needs and for heating can be guaranteed in the winter and spring by further reducing supplies to industrial users," Lin Changhai, general manager of PetroChina's gas sales unit in northern China, was quoted as saying.
In southwestern Chongqing, taxis lined up for compressed natural gas as the sudden drop in temperatures slowed pipeline flows, lengthening refuelling time. Many were reluctant to shift to gasoline, which costs three times as much.
Gas supplies for taxis in Wuhan, Hubei Province, were halted from November 16, forcing the local government to pay subsidies to taxi drivers who switched to gasoline.
Scores of firms in Hangzhou, Zhejiang Province, were shut because of gas shortages, while hundreds of buses in Zhengzhou, Henan Province, faced being grounded.
"We had to switch to diesel in two of our plants," said Xu Jianyun, a manager of a tire maker in Hangzhou. "We still see a lot of uncertainties in gas supply for the coming months and will stick to diesel."
PetroChina and Sinopec, the No. 2 gas producer, also curbed consumption by their own units. "We were using LPG to fill the natural gas gap, so our production was not affected," said an official at Sinopec's Qilu refinery, where supplies were cut by 200,000 cubic metres a day.
Gas supplies to PetroChina's Lanzhou refinery were also cut by 200,000 cubic metres to about 900,000 cubic metres a day.
The National Development and Reform Commission, China's economic planning agency, has said tight gas supplies are gradually easing thanks to coordinated efforts by the government and major gas producers.
Sinopec's fourth-quarter daily production is at a record of 23.8 million cubic meters on average, up 1.8 million cubic meters versus the third quarter, the firm said yesterday. It curbed supply to its own refineries by at least 450,000 cubic meters a day.
PetroChina was also pumping at maximum rates, raising its daily output to nearly 200 million cubic meters from 169 million cubic meters in early November.
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