Long-term bullish natural gas prices

The natural gas price reform plan has been promulgated for nearly six months, and the results have been gradually implemented while gradually implementing the plan. China will strive to adjust natural gas prices at the end of the “Twelfth Five-Year Plan” period. According to estimates by experts, domestic natural gas prices will increase by nearly 80%.

On December 12, Dai Jiaquan, deputy director of the Petroleum Market Research Institute of the China National Petroleum Institute of Economics and Technology, stated at the 7th China-Japan Oil Market Research Results Exchange Meeting that the company's stock movements were 8.01+0.000.00%, indicating that with the Chinese energy price With the continuous implementation of the reform, the inverted price of natural gas imports will gradually decrease. According to the estimate of the link price, the natural gas price in China will increase by 77% in 2015, which will be approximately 30% lower than that of gasoline and diesel. The price advantage of natural gas will be weakened.

As China's natural gas prices are strictly controlled, domestic natural gas consumption has grown at a rapid rate, with an average annual growth rate exceeding GDP and total primary energy consumption. Data show that from 2000 to 2012, China's apparent consumption of natural gas increased from 25.4 billion cubic meters to 147.1 billion cubic meters, an average annual increase of 16.1%, significantly more than the average annual growth rate of 10.1% of GDP and 7.9% of total energy consumption. In the same period, the share of natural gas in primary energy consumption increased from 2.2% to 5.2%.

With the increase in consumption, domestic natural gas alone can no longer meet demand, and China has been importing LNG (liquefied natural gas) since 2006. In 2012, natural gas imports reached 42.4 billion cubic meters, an increase of 34.9% year-on-year. Of this total, 22 billion cubic meters of pipeline gas and 14.68 million tons of LNG were imported. The pipeline gas import volume exceeded LNG for the first time, and the dependence on imports had risen to 28.8%.

Although the import gas continued to increase, the gas business suffered a serious loss of natural gas due to the serious inversion of the import gas price and the domestic market price.

Dr. Wang Haibo of the Petroleum Market Research Institute of the PetroChina Institute of Economics and Technology said that in addition to the long-term trade gas signed by CNOOC, the prices of imported pipeline gas and LNG were significantly higher than the price of local portals, plus import VAT, gasification, and pipeline losses. After that, imported gas faces serious losses, which will affect the enthusiasm and supply reliability of natural gas suppliers.

“In the case of Jiangsu, an importer, the import price of LNG in 2012 was 4.16 yuan/cubic meter; the lowest price for city gate stations was 2.42 yuan/cubic meter,” Wang Haibo said. In addition, the natural gas import business of China Petroleum (601857.SH) suffered a loss of RMB 41.9 billion in 2012, which is equivalent to 36% of the company's net profit.

On June 28, 2013, the National Development and Reform Commission issued the "Notice on Adjustment of Natural Gas Prices" by the National Development and Reform Commission. The plan was implemented on July 10, 2013. The train of thought on the one hand is to distinguish the stock gas and the incremental gas, and the price of the incremental gas is adjusted to the level of reasonable price comparison with alternative energy such as fuel oil and liquefied petroleum gas (with weights of 60% and 40%, respectively); On the one hand, the stock gas price has been adjusted step by step, and efforts have been made to adjust the position at the end of the “12th Five-Year Plan” period.

Since the price adjustment in July, its effect has also been initially reflected in the performance of domestic oil and gas companies. In the first three quarters of 2013, CNPC's natural gas and pipeline segment realized operating profit of 23.438 billion yuan, an increase of 22.553 billion yuan from 885 million yuan in the same period of the previous year. The reasons for this increase include the introduction of natural gas price adjustment programs.

Cheng Ruifeng, an analyst at Oriental Oil and Gas Network, told the reporter of the First Financial Daily that due to factors such as the increase of non-civilian natural gas prices, the increase in the use of natural gas by the national environmental protection requirements, and the increase of CNPC’s pipeline in the southwest, the profitability of other business segments has been different. When it falls, the natural gas business will become its biggest profit growth point in the future.

Over the past decade or so, China’s rapid growth in natural gas consumption has been driven by factors such as rapid economic development, increased pressure on environmental protection, imperfect storage and transportation networks, and long-term price advantage. In the future, under the background of economic growth slowdown and weakening of price advantage, environmental protection will become the main force driving the growth of natural gas demand.

The research report of the Research Institute of PetroChina Economic Technology and Technology shows that the demand for natural gas will continue to increase, and the proportion of primary energy will continue to increase. Under the baseline scenario, natural gas demand in 2015, 2020, and 2030 was 205.9 billion cubic meters, 306.4 billion cubic meters, and 466.9 billion cubic meters, respectively, accounting for 6.4%, 8.5%, and 11.9 of total primary energy consumption respectively. %.

However, Wang Haibo also explained that the deepening reform of China's natural gas prices also needs to address the double-track system of stock gas and incremental gas prices, the rationality of linking with alternative energy sources, and how to timely and accurately transmit market supply and demand signals.