In the last two decades, China has become the largest importer in the world of natural gas (LNG). However, in a drastic turn of the event, the Asian giant will stop depending on the gas of others. This change will have consequences in the world market.
Short. Large Chinese oil companies, such as Sinopec, CNOOC and Petrochina have focused their internal gas production, focusing on deeper perforations and the development of shale gas resources, as explained in Bloomberg. This new path responds to the deceleration of oil demand, the rise of electric vehicles and the growth of internal gas production, which would affect the projections of large international energy companies.
New exploration in China. The three great Chinese oil companies are making significant investments in deep drilling, both on land and on the high seas. As Oilprice has had access, they are intensifying the exploitation of shale gas deposits, with notable advances in the Sichuan basin, and are also exploring deeper seas in search of new reserves. In the same medium it has been detailed that Petrochina is drilling wells of 10,000 meters deep to access gas and oil resources in complex rock formations.
It will not be easy. This movement towards energy self -sufficiency raises several challenges, since the extraction of shale gas in China is between complex geological formations, which increases production costs. However, as explained in Bloomberg, the plans to obtain gas are already underway and they will not stop them.
In check the global production. International companies such as Shell, Exxonmobil and Totalenergies had planned an increase in their LNG exports to China, waiting for the country to be the largest consumer. However, this change of plans by the Asian giant to produce more gas internally and depend less on imports will affect global supplies, altering the projections of large oil companies, according to Oilprice.
And what will happen in Europe? The month of April has not started very well in gas for Europe, since reserves have been left to zero, according to Bloomberg. However, the new change in gas consumption policies in China could be beneficial for the old continent, who needs to start filling their gas reserves.
However, the situation remains uncertain. How Oilprice has pointed out, although there would be more available gas, competition for the LNG is still high, and logistics infrastructure to distribute it quickly may not be completely adapted to these changes. This could affect Europe’s capacity to access that excess gas in time and lower prices.
Forecasts. The projections indicate that, with the increase in internal production and the rise of electric vehicles, the need for LNG imports of China could decrease in the coming years. For this reason, there may be a drop in imports, which would affect the decisions of global gas producers.
However, the current energy panorama is marking for many geopolitical tensions that will affect oil. Recently, there has been an important change in the sector, with OPEC+, the United States and China involved in a complex situation. As detailed by the New York Times, tariff policies and energy strategies are intertwining, which alters the flow of resources and causes greater uncertainty in crude oil markets, affecting the Price of fuel worldwide.
Imagen | Asian Development Bank (Flickr, CC BY-NC-ND 2.0)
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