BEIJING Oct 31 China unveiled on Wednesday a
natural gas policy designed to spur the transport sector's use
of the cleaner-burning fuel, and particularly of liquefied
natural gas (LNG), as the world's second-largest user of fuel
reins in consumption of dirtier oil.
Besides homes, utilities and factories, the government for
the first time targeted the transport sector, covering buses,
taxis, trucks, and vessels as preferred users of natural gas,
according to a document published on the website of the National
Development & Reform Commission (www.ndrc.gov.cn).
"It's certainly a good policy that will see gas replacing
quite a lot of diesel, which is the main fuel used in China's
transport sector and is much more polluting," said analyst Yan
Kefeng of Cambridge Energy Research Associates (CERA).
The world's top energy user is poised to triple natural gas
use to meet about 10 percent of total energy demand by the end
of this decade, to cut emissions from coal use, and dependence
on oil imports.
The policy push would lead to the world's biggest fleet of
LNG-fuel led vehicles, as it is both cheaper and more efficient
than the conventional gasoline and diesel, experts have said.
To supply the fuel, leading energy firms CNOOC Ltd
, PetroChina and Sinopec Corp are
building a string of facilities along China's eastern shore to
import LNG, gas super-cooled to liquid form for shipping in
Others are building smaller plants inland to liquefy natural
gas from gas fields distant from the main pipeline networks. LNG
tankers then truck them across the country to end-users.
In the eastern province of Jiangsu alone, the number of
LNG-fuelled vehicles is expected to exceed 6,000 by 2015.
Southern Guangdong province wants to replace LPG, a more costly
refinery product, with LNG for buses.
In the NDRC statement, the government bans use of natural
gas as feedstock for making methanol or the base-load
gas-fuelled power generations in coal-rich regions.
It also curbs use of natural gas to produce fertilizer.
"Natural gas is still a precious resource in China, so the
government wants to manage the demand side as well," said Yan.
The NDRC, China's top economic planning agency, also said it
would push gas price reform and establish a better link between
prices of natural gas and alternative fuels. A pricing link
between gas production and consumption and a seasonal gas
pricing system are also in the pipeline.
Beijing last revamped its gas pricing model in December
2011, freeing up wholesale prices for unconventional gas and
launching a pilot scheme to link domestic gas prices to imported
(Reporting by Chen Aizhu and Judy Hua; Editing by Clarence