The growth and development of natural gas in China

Whilst the growth of natural gas usage for industrial and power generation purposes is developing swiftly across Asia no country is investing as much money and effort into building their natural gas infrastructure as China is currently doing. Not only is the country developing long distance west to east gas pipelines to import the gas from neighboring countries it is also investing heavily into its exploring for domestic energy resources for the clean fuel which is already in big demand. In addition to these significant steps being taken to supply demand across the country there are now many Liquefied Natural Gas (LNG) receiving terminals coming online to receive large shipments of the cleaner fuel from overseas suppliers.

Recently, China National Petroleum Corp (CNPC) put its trunk line of China's second west to east natural gas pipeline into service. When the pipeline is fully completed in June 2012, it will be able to transport 30 billion cubic meters (cu m) of natural gas annually from Central Asia and the Xinjiang Uygur autonomous region to the energy hungry Yangtze River and the south eastern Pearl River deltas. This second West-to-East gas pipeline which comprises of a main line and eight sub-lines required a total investment of RMB 142 billion yuan ($21.88 billion). The energy project has been reported to be the world's longest gas pipeline project, with its combined length of 8,653 kilometers.

Reports show that China’s imports of natural gas imports in the first five months of 2011 surged by 91.4 percent to 7.8 million tons when compared with the same period last year, signaling that the Chinese government's efforts to encourage natural gas consumption have started to work. The apparent consumption of natural gas rose 18 percent in the first five months of 2011 to 19.8 billion cubic meters. It is estimated the average growth rate of gas consumption will stand at about 20 percent in the coming years but China’s domestic output of the clean fuel will rise by about 10 percent annually. As a result of this imbalance the nation’s accelerated development of unconventional natural gas, including shale gas and coal-bed methane (CBM) will help to ease its heavy reliance on natural gas imports to boost supply.

Gas is an ideal fuel for power generation

In the past few years China’s natural gas fired power generation capacity has increased considerably as the nation’s power producers have become aware of the fuel’s environmental and high efficiency benefits. A number of global power technology and equipment suppliers have teamed up with some of China’s larger power companies in order to exploit the potential for gas fired power generation in China. One such global supplier is Siemens Power Generation (PG) who formed a consortium with Shanghai Electric (Group) Corporation (SEC) and together they secured an order to deliver three gas turbines for the Huaneng Shanghai 3x400MW Combined Cycle Power Plant (Shidongkou) The consortium’s customer Huaneng Power International Inc is one of the largest utilities in China.

Combined Cycle Power Plants (CCPP) are the most efficient and environmentally friendly fossil fuelled power plants. They provide electricity at low costs and with the highest flexibility. CO2 emissions are clearly less than those of coal-fired power plants due to the fuel containing less carbon and due to the very high efficiency of a CCPP. On a very high efficiency level (net efficiency: ~58%) and with an installed capacity of 1020 MW the Shidongkou CCPP generates environmentally friendly power for the Shanghai area. The plant was constructed by Shanghai Electric Power Construction Group and the main equipment was jointly designed by SEC and Siemens PG.

The power plant comprises of three 400 MW F-Class single-shaft power blocks with each block featuring a 260 MW Siemens SGt5-4000F gas turbine. The exhaust gas from each gas turbine is driving a 140 MW steam turbine giving a maximum output of each turbo-generator of 403.32 MW. There are very low levels of emissions from the Shidongkou CCPP and an additional environmental benefit is that the water used in the CCPP is cleaned in a water/lube separation plant and re-circulated with no discharge of wastewaters.

China intends to double its usage of natural gas to about eight percent of energy consumption bt 2015 which will significantly reduce its current reliance on more polluting energy resources such as oil and coal and will serve to reduce greenhouse gas emissions. Current estimates say that China’s natural gas demands could rise to 230 billion cubic meters (cu m) in 2025, up from the current 130 Billion cu m. The country’s swift economic expansion and accelerating urbanization are creating strong demands for natural gas consumption. So, whilst coal is still king for power generation in China natural gas is catching up fast.

John Goss, Director of Ceejay International