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EIA: China increased both natural gas imports and domestic production in 2021

Published by , Editorial Assistant
Hydrocarbon Engineering,

In 2021, an average 35.5 billion ft3/d of natural gas was consumed in China, more natural gas than in any previous year. More than half of the natural gas consumed in China in 2021 came from domestic production, but China also imported record amounts of natural gas by pipeline and as LNG, based on data from Global Trade Tracker and China’s General Administration of Customs.

Government policies promoting coal-to-natural gas switching to reduce air pollution and meet emissions targets have been a major factor in the rapid growth of both domestic natural gas production and natural gas imports in China. In March 2022, China’s government released its 14th Five-Year Plan (2021 – 2025), which sets the domestic natural gas production target at 22.3 billion ft3/d by 2025, or 3.0 billion ft3/d more than domestic production in 2021.

In 2021, 56% of domestic natural gas production in China was natural gas produced from discrete gas reservoirs and associated natural gas from oil production. Production of natural gas from tight gas, shale gas, and coalbed methane collectively accounted for 44% of domestic natural gas production in China during 2021. Various government subsidy programs supported these projects. China’s development of natural gas from sources that use hydraulic fracturing is a key part of the government’s strategy to secure domestic natural gas supply.

Tight gas production in China has grown since 2010, when companies initiated an active drilling program that lowered the drilling cost per vertical well and improved well productivity. In 2021, China produced 4.6 ft3/d from tight gas formations, compared with 1.6 ft3/d of tight gas produced in 2010.

Shale gas development in China has increased steadily in the past few years, growing 21% annually since 2017. In 2021, shale gas production totaled 2.2 ft3/d, which was below the government target of 2.9 ft3/d by 2020.

Coalbed methane development in China faces significant challenges, including relatively low well productivity and relatively high production costs. In 2021, coalbed methane production reached 1.0 ft3/d, or 5% of China’s total natural gas production.

In China, production of synthetic natural gas from coal, which involves gasifying coal into methane at five available plants, totaled 3% of domestic production in 2021.

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