December 13, 2018 / 6:12 AM / in 4 months

China turns up gas heat in 3 mln more homes

    * New users could add 4.5 bcm of gas demand 
    * China also switching 1.5 mln households to electric
    * Residents facing expensive heating bills

    By Meng Meng and Dominique Patton
    BEIJING, Dec 13 (Reuters) - China has switched another 3.29
million households to gas heating this winter, Reuters
calculations show, more than it added last year, as Beijing
continues to push the use of cleaner fuels to curb pollution. 
    Gas heating has been installed in recent months across a new
swathe of northern China - known for its heavy smog -
underlining the government's commitment to reduce pollution even
after last year's efforts triggered a fuel shortage that left
people freezing in their homes. 
    The new gas users will require an additional 4.53 billion
cubic metres (bcm) of gas in the Nov. 15 to Mar. 15 period, but
analysts said the increase would not necessarily boost overall
consumption in the country. 
    "If China wants to deliver gas as promised to households, it
will sacrifice industrial supplies," said Chen Zhu, managing
director of consultancy SIA Energy. 
    Last year's surge in gas demand combined with inadequate
storage and insufficient infrastructure to cause a supply crunch
that pushed prices to record levels just weeks into the heating
season, forcing Beijing to pause its clean-fuel campaign. 
    This year, a warmer-than-usual November, slack industrial
demand and higher supplies of liquefied natural gas (LNG) have
pressured wholesale gas prices. China's energy majors also
bought more supplies ahead of the heating season, with November
gas imports via pipeline and ship hitting a record.
    Even so, China is unlikely to meet the additional demand
from the new users, without cutting some supply to industry,
Chen said. 
    Reuters calculated the number of new households that
switched to gas boilers by subtracting the number of new
electricity users reported by State Grid - China's dominant grid
operator - from the total new households reported as using clean
fuels by the Ministry of Ecology and Environment. 
    An additional 1.5 million homes will use electricity for
heating, the numbers show, after Beijing proposed electric power
as an alternative to gas for cities in the Fenwei Plain. 
    The Fenwei Plain includes parts of Shanxi and Shaanxi, two
of China's biggest coal-producing provinces, as well as Henan.
Cities in the Fenwei Plain were included by Beijing as a "key
battlefield" in its war against air pollution in July, in
addition to 28 other cities in northern China.     
    China's top steel-making province, Hebei, and top
coal-producing region Shanxi were most aggressive in switching
to gas heating, while homes in Beijing and Shaanxi province
added more electricity than gas. 
    Chen Hao, a resident of Xi'an, capital of Shaanxi province,
said he doubted whether local households earning an average of
3,000 yuan a month could afford the extra 500 yuan in winter
heating bills after switching to gas. 
    Some people will also still burn coal, after local
governments relaxed an outright ban on coal for heating in
places not connected to gas supplies.
    "This winter, village officials are under pressure to keep
us warm," said an elderly farmer surnamed Liu living in
Zhangjiapu village in Shanxi province.  
    Last year, Liu survived the winter without heat. 
    The table below shows the number of new gas or electric
heating users this year, according to data published by the
Ministry of Ecology and Environment and State Grid. 
                 New  New power      Total   Gas  Power          Gas
           household      users             user   user  consumption
           gas users                         pct    pct     from new
                                                          users this
                                                            year (in
 Beijing      39,000    122,600    161,600   24%    76%       0.054 
 Hebei      1.45 mln    319,000   1.77 mln   81%    18%       2.000 
 Tianjin     154,100     35,900    190,000   81%    19%       0.212 
 Shandong    210,000    240,000    450,000   47%    53%       0.289 
 Henan       598,000    300,000    898,000   67%    33%       0.824 
 Shanxi      601,000     62,000    663,000   91%     9%       0.828 
 Shaanxi     237,000    470,000    707,000   34%    66%       0.327 
 Total      3.29 mln   1.54 mln   4.84 mln   68%    32%       4.534 
 (Reporting by Meng Meng and Dominique Patton; Editing by Tom
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