Market drivers

China is already the fastest growing gas market globally, and the fourth largest gas consumer in the world. Growth is driven by economic and population growth, as well as by government policy to increase the proportion of energy generated from domestic gas production. The Chinese economy has grown by an average of 10% a year over the past two decades, with stable energy supplies being at the core of its continuing growth.

China’s 12th Five-Year Plan (2011-2015) prioritises cutting carbon emissions by reducing its use of coal and oil, with natural gas the preferred energy source. As part of this, the central government confirmed that it will increase support for CBM research and development and the training of CBM specialists.

Gas still accounts for only 5% of the nation’s energy mix, targeted to rise to 10%, or 13,000 BCF by 2020. Macquarie estimates that China’s demand for gas will outstrip supply by 2017, and this shortage will rise to more than 50% of current production unless new sources are added. Gas demand could easily quadruple to 21,000 BCF by 2020, 55% above the state target, if China embraces more aggressive anti-pollution measures.