(Adds federation comment, details)
By Chen Aizhu and Adam Rose
BEIJING Jan 12 China's natural gas demand may
rise 6.5 percent in 2016, up from last year's tepid growth, as a
cut in government-set prices and efforts to promote gas usage
will lift demand for the fuel, said an official at a Chinese
China's gas demand - hit by a slowing economy and an
inflexible pricing mechanism - grew at less than 4 percent in
the first 11 months of 2015, official data showed, a far cry
from the heady years between 2004 and 2013 when gas use jumped
Natural gas demand is expected to rise to 199 billion cubic
meters in 2016, Zhu Fang, head of market information department
at the China Petroleum and Chemical Industry Association told
Reuters after a media briefing by the association on Tuesday in
In November, China's government cut wholesale gas prices by
"Structural changes that promote cleaner fuels and the price
cut are going to boost demand this year," said Zhu.
A low base in 2015 also helped the growth rate, he added.
The government-backed association also predicted the
country's demand for crude oil will rise 4.9 percent this year
to 570 million tonnes, or 11.37 million barrels per day (bpd).
"Stockpiling (at low oil prices) will continue to lend
support to oil demand," said Zhu. "We also expect the government
to roll out policies this year to stimulate domestic
consumptions that would eventually lift oil use."
The federation calculates apparent crude oil demand by
adding domestic crude oil production to net imports of crude
oil, the official said.
China's oil demand - refinery runs plus net imports -
moderated in 2015, with November demand dropping 2.5 percent
from the year ago period, according to Reuters calculations.
Even with demand moderating, stockpiling in government and
commercial tanks has propped up growth in China's crude oil
imports, which were up nearly 9 percent Jan-Nov.
Industry experts said Chinese firms could expand purchases
possibly even more this year, as new tanks become available.
The federation said earlier on Tuesday that China's apparent
oil and gas consumption is expected to rise 4.8 percent this
year to about 750 million tonnes of oil equivalent.
The CPCIF also said that China's oil and gas exploration
business, dominated by state energy giants such as PetroChina
and CNOOC Ltd, suffered a 69 percent decline
in profits last year, whereas profits for the refining sector,
led by Sinopec Corp, increased more than fourfold
(Reporting By Aizhu Chen and Adam Rose; Editing by Christian