Beijing Gas new LNG import project in the Nangang district of Tianjin is backed by a $500 million loan from the Asian Infrastructure Investment Bank (AIIB). Going forward, Beijing Gas plans to gradually expand the Tianjin LNG terminal which will add to Sinopec’s existing Tianjin North import terminal and CNOOC’s floating storage and regas unit (FSRU).
Watering down Coal-to-Gas policy
Greater availability of attractively-priced natural gas, both LNG and pipeline gas, is vital to encourage power producers to turn away from burning thermal coal. The ‘Blue Skies’ policy, imposed in 2018, expands pollution controls to 82 cities across northern and eastern China. The regions that fall under the government's “Blue Sky” plan are now home to 37% of population contributing to 41% of China's GDP.
However, Beijing policy makers in winter 2019/20 slowed their green energy push due to a weakening economy and competition from cheaper coal. Still, gas demand is forecast to rise nearly 8 percent, reaching 145 billion to 150 billion cubic meters (bcm), according to Sinopec.
"Based on what is practical, we should use electricity where electricity is available, gas where gas is sufficient, and coal where coal supply is ample," Premier Li Keqiang recently commented on energy security this winter.
LNG can help reduce reliance on coal. But coal is still king in China’s energy mix as the dominance of this highly emissions-intensive fuel has increased in China in 2019, reaching 48.1 percent of global coal consumption. The People’s Republic remains the world's largest coal producer, consumer and importer.