By Ma Dongwei

According to a report released recently by the National Energy Administration in China, the country's natural gas consumption is projected to reach 435 billion cubic meters in 2026, up about 1% on year. Escalating geopolitical tension and the obstruction of key shipping routes have led to tight global natural gas supply and a significant increase in international gas prices. Faced with this complex external environment, China's natural gas industry has coordinated efforts in production, supply, storage, and sales, resulting in a generally stable market.

In the first half of the year, domestic natural gas production reached 133 billion cubic meters, up about 1.6% on year. Natural gas imports totaled 57.38 mil mt, down 3.5% on year. Of this, pipeline gas imports decreased by 1.2% on year while LNG imports fell 5.8% on year. Domestic natural gas consumption was estimated at 213 billion cubic meters, up 1.1% on year.

By sector, urban gas consumption saw stable growth, with significant growth driven by LNG-powered heavy-duty trucks in the transportation sector. Power generation consumption remained largely flat, mainly due to ample supply from coal-fired power plants and renewable energy sources such as hydropower, wind power, and solar power. Industrial gas consumption declined year-on-year, primarily due to the substitution and crowding out of demand from some price-sensitive, high energy-consuming, and low-end industries. Chemical and fertilizer gas consumption saw a slight decrease.

If LNG exports from the Middle East can recover in the fourth quarter, market sentiment may ease somewhat. However, current strong restocking demand in Europe and the US, increased natural gas demand due to extreme high temperatures in Europe, and the continued resilience of China's natural gas market suggest that the global natural gas market may remain tight in the second half of the year, with international gas prices likely to stay volatile. Domestically, the macroeconomy is growing steadily, and natural gas demand is generally stable.