Competitive strengths

The expansion of the Chinese economy has led to a rapidly increasing demand for energy resources which is currently outstripping supply, resulting in dependence on imported oil and gas and domestic coal production to meet the PRC’s current energy needs.

The strengthening demand outlook for domestic gas is expected to be positively impacted by the shortage of oil resources in the inland provinces where much of the PRC’s and the Group’s CBM resources, are located. Domestic natural gas consumption in the PRC is expected to reach 349.3 Bm3 (12,335 BCF) a year by 2020, of which domestically produced unconventional gas (CBM, tight gas sands, shale and gas hydrates) is expected to become a significant source of supply.

The Group is well placed to meet the demand shortfall that and caused by the gas consumption and supply in the coastal cities such as Beijing and Shanghai being satiated first in line with government policy.