UPDATE 1-China fuel stocks up as demand slows; record gas imports

Mon Jul 18, 2011 11:55pm EDT

Related Topics

* End-June fuel stocks up nearly 1 mln tonnes and at a normal level

* Apparent fuel demand up 7.2 pct in first half

* Jan-June gas imports at 14.1 bcm, suggesting record buy in June (Adds details, background)

By Jim Bai and Ken Wills

BEIJING, July 19 (Reuters) - China's refined oil product stocks at the end of June increased nearly 1 million tonnes from a year earlier and were at a normal level, after fuel consumption slowed down since mid-April, a government report showed on Tuesday.

Fuel consumption averaged 665,000 tonnes a day in the second quarter, off a record daily rate of 701,000 tonnes in March, the National Development and Reform Commission (NDRC) said in a report on its website (www.ndrc.gov.cn).

Apparent consumption of refined oil products gained 7.2 percent on year to 118.39 million tonnes in the first six months, in which diesel consumption rose 6 percent to 74.47 million tonnes and gasoline use grew 8.7 percent to 35.25 million tonnes.

Apparent fuel consumption gained 9.3 percent on year to 57.93 million tonnes in the first quarter, the commission said.

The commission did not explain the gauges or the methods it uses to derive the figures.

China's fuel demand has shown signs of slowdown in past months as oil plants underwent heavy maintenance amid poor refining margins and Beijing's tightening economic policy cut into oil use.

Reuters calculations based on preliminary official data showed implied oil demand, a combination of crude oil throughput and net imports of refined oil products, averaged 8.97 million barrels per day (bpd) in June, down 3.2 percent from May, and slipped below the 9 million bpd mark for the first time in 8 months.

RECORD GAS IMPORTS

The commission said China's natural gas imports in the first half of this year grew 100 percent from a year ago to 14.1 billion cubic metres (bcm).

This suggests the country brought in a record 2.7 bcm of the fuel last month based on January-to-May import figure released earlier by the commission.

Of the imports in the first six months, gas piped in from central Asia totalled 6.9 bcm and imports in the form of liquefied natural gas were at 7.2 bcm, it said.

The overall imports accounted for 22.4 percent of China's national gas consumption, 9 percentage points higher than a year earlier.

Apparent gas consumption in the first half gained 21 percent on year to 63.1 bcm, according to the commission.

PetroChina , China's dominant gas producer, supplied 1.83 bcm of gas to six gas-fired power plants in Henan and Jiangsu provinces in the first half, 64.9 percent more than a year earlier.

It also increased supplies to Zhejiang province by 15.4 percent to 1.06 bcm in the January-to-June period.

The National Energy Administration, China's top energy watchdog, was reported by state media last week to have asked PetroChina and Sinopec Corp to further increase gas supplies to power plants during peak electricity demand time.

Jiangsu has 14 gas-fired power generators with total capacity of 3.66 gigawatts (GW) or 6 percent of overall power generating capacity in the province, while Zhejiang has 18 generators with capacity of 3.95 GW or 10 percent its total capacity, the administration said.

Gas-fired power production, more expensive than coal-fuelled power generation, accounts for only a tiny part of China's electricity output.

China is in the early stages of a massive development of its gas market. Traditionally a coal user, it is striving to switch to cleaner fuels in the course of this decade and gas is expected to meet much of the incremental demand for power, along with hydro, nuclear and wind power. (Editing by Jacqueline Wong)

FILED UNDER: