Following the National Development and Reform Commission, the Ministry of Ecology and Environment and the Ministry of Commerce have also successively made statements from their respective perspectives on addressing the natural gas supply gap issue. On December 7th, Beijing Business Journal reporters learned from the industry that the Ministry of Ecology and Environment has issued an urgent document, "Letter on the Comprehensive Treatment of Coal and Ensuring the Warm Winter for the Public," to the "2+26" cities in the Beijing-Tianjin-Hebei region and surrounding areas. It clarifies that incomplete coal-to-gas (electricity) projects and localities should continue to use past coal heating methods or other alternative ways. Meanwhile, at the Ministry of Commerce's regular press briefing on the same day, spokesperson Feng Gang also made it clear that China actively supports enterprises in diversifying the import of overseas natural gas resources. However, in the industry's view, the construction of gas storage facilities and the entire oil and gas system reform process are relatively slow, which is the core issue China needs to face in the natural gas supply process.
Jointly ensure supply
As China's energy structure adjustment progresses, the role of natural gas in energy consumption is increasingly strengthened, with its weight in heating and power supply continually increasing.
However, the document issued by the Ministry of Environmental Protection also points out that recently, during the verification process, the Ministry has found issues such as tight natural gas supply during the heating season in some regions. Therefore, the document states that in the progress of coal combustion control, completed projects and localities must ensure a stable supply of gas and electricity as well as stable prices.
On the same day, Fenggang also clarified the attitude of ensuring natural gas supply from the import perspective, "Our country attaches great importance to the guarantee of natural gas supply and actively supports enterprises in diversifying import of overseas natural gas resources while increasing domestic natural gas production." Fenggang said that with the completion and operation of new cross-border natural gas pipelines, coastal liquefied natural gas receiving stations and other infrastructure, the import capacity and level of our country's natural gas is expected to be further enhanced.
On the other hand, the National Development and Reform Commission (NDRC), the department in charge of pricing, has also begun to strictly regulate the prices of natural gas supply. Data shows that the price of liquefied natural gas at the factory has surged sharply in the short term, reaching a historic high of 9,400 yuan/ton on December 1st. According to the National Bureau of Statistics, the market price for this product was only 4,337 yuan/ton at the end of October. Beijing Business Journal reporter learned from the industry that the NDRC has issued a notice to local NDRCs (Price Bureaus) regarding the deployment of a reminder meeting on the legal and policy of liquefied natural gas prices, explicitly reminding and advising liquefied natural gas enterprises and relevant social organizations to:自觉 comply with price laws and regulations, maintain the price order of the industry, not to fabricate and disseminate price increase information, not to hoard and manipulate prices maliciously, not to abuse market dominance, and not to reach monopolistic agreements, etc.
Deputy Director of the Policy Research Office of the China National Petroleum Corporation, Wang Zhen, also pointed out in an article that there is no separate pricing item for storage cost in our current pricing system. Storage facilities are facing issues such as a lack of investment return channels and a missing market trading mechanism. The cost compensation and performance assessment mechanisms are both very unclear, which has seriously hindered the commercial operation and development of storage facilities.
Han Xiaoping frankly pointed out that the slow progress in the construction of gas storage facilities highlights the issue of insufficiently ideal implementation efficiency in the reform of the oil and gas system. After multiple broken promises, in May of this year, our country issued "Opinions on Deepening the Reform of the Oil and Gas System," which has become the most comprehensive and three-dimensional guiding document since the new round of oil and gas reform was proposed in 2014. However, experts also noted that the essence of the oil and gas reform is to liberalize market access and pricing in the upstream, midstream, and downstream sectors of the oil and gas industry, dismantle barriers that favor state-owned enterprises and regulate private capital, and allow more capital to enter the oil and gas industry. Currently, the oil and gas sector in our country is largely monopolized by state-owned enterprises, and it may take a relatively long process to allow state-owned enterprises to share profits with private enterprises.
