Cold snap forces China to ration natural gas

The cold snap which recently hit China has forced Beijing to ration its natural gas supply, underscoring the challenges the country faces in adopting cleaner heating for winter.

Beijing’s government last Friday said China National Petroleum Corporation (CNPC) – the country’s biggest oil and gas producer – was facing a shortage of natural gas for indoor heating. It explained that this was because demand surged last weekend, when a cold front saw temperatures plunging across the country to 30-year lows.

In the capital, the mercury dipped to minus 16 deg C, from the usual lows of minus 8 deg C to minus 10 deg C at this time of the year.

READ: China hit by eye-watering cold snap

As an emergency response measure, the city will maintain indoor temperatures in public buildings at only 14 deg C, the Beijing authorities said in a statement. Usually, indoor temperatures are kept above 20 deg C.

Affected places include schools, offices and department stores, with some buildings sending out individual notices reminding tenants to wear more warm clothes. Gas supply for industrial production has also been suspended.

The authorities did not specify how long the measures will last, but this is the second time in two months that Beijing has faced a shortage of natural gas.

Last month, similar emergency measures were implemented for four days after heavy smog delayed the unloading of imported liquefied natural gas (LNG) by tankers, which was meant to satisfy peak winter demand.

China provides subsidized central heating to homes in the north. But as part of its efforts to cut smog, it has, in recent years, been pushing for a switch to natural gas as a source of public heating during winter, instead of the traditional coal.

That received greater impetus last month, when the capital was blighted by severe smog which resulted in long spells of hazardous air quality.

To encourage usage, the authorities cut natural gas prices twice last year, for business and industrial users in areas such as Beijing, Shanghai and Guangdong.

But experts say one of the reasons for the shortage is that gas prices – which are set by the government – are not adjusted when demand rises.

Inadequate storage facilities is another factor, although media reports say the country has been trying to address that by building more gas pipelines, underground storage facilities and LNG terminals. As of end-2014, China had already built 69,000km of gas pipelines, with plans to add 5,000km to 6,000km more every year.

CNPC said it has been raising domestic production and importing more gas from abroad, although it was not enough to prevent the sharp fall in its reserves.

China has also secured deals with Russia and Central Asia to raise its supply of piped natural gas to Beijing and its surrounding areas.

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