Price Cuts for Natural Gas Aimed at Switching Coal Users
The demand for natural gas in China has been boosted by price cuts which are aimed at switching customers of coals to look into using cleaner fuel. Based on the country’s biggest gas distributor ENN Energy Holdings saw it sales rise more than 15 percent in January and February as lowering prices have encouraged customers in switching. ENN is also expecting sales to rise by 15 percent after last year’s 11.5 percent jump or 11.3 billion cubic meters.
The movement is picking up a lot of momentum and that higher burning efficiency of gas along with the pressure from the government for better emission standards are helping users convert from coal to gas. The government adjusted gas prices twice in hopes to stimulate demand and shift consumption from coal which is 64 percent of the country’s energy mix. Natural gas share is rising from the current 6 percent, adding that users are switching from coal makes up around 39 percent of new commercial and industrial customers.
The demand for gas in China expanded by 3.3 percent in 2015 and coal consumption dropped 3.7 percent for the second year and will slip even further down this year even with tepid demands from industrial users. Liquefied natural gas imports increased by 14 percent for the first two months of 2016 and pipeline shipments have also increased by 15 percent.