China: Oil and Gas

Overview

China now ranks No.2 in world energy consumption. Economists predict that by 2020, China’s GDP will be over USD 4 trillion and the consumption of China’s oil and gas will be about 5 billion barrel of equivalence (BOE). The Chinese government continues to push through reform and industry restructuring measures in order to encourage the necessary investment needed to meet energy demand growth.

Natural gas is the fastest growing fuel in China's energy mix. Natural gas consumption in China is expected to rise to over 10% by 2020 in light of increasing LNG imports as well as domestic discoveries. From 2006 to 2020, China's natural gas infrastructure construction will involve a CNY 220 billion investment.

On the oil side, China became a net importer of crude oil in 1996. Imports are expected to rise from 1.7 million barrels/day in 2001 to 4.2 million barrels/day in 2010, and to 9.8 mb/d in 2030. At the same time, currently producing oil fields have been on the decline for over a decade. As a result, the domestic supply of oil will be insufficient in meeting demand forecasts. Thus, there will be an increased reliance on imported oil in the future.

U.S. companies are taking in providing advanced technologies in upstream and downstream oil and gas construction and development. Many Chinese end-users have favorable opinions of American products and are eager to do business with American companies. China’s booming natural gas industry will spur the demand for single space related products, equipment and engineering services. “American” equipment has a reputation for technological excellence and quality. Innovation, automation, and precision make U.S. equipment and technology superior to that of its competitors.

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