energy industry is undergoing rapid change as energy demand
surges and the markets open to private sector participation. China's
economy is now the third largest in the world.
Many sectors of the oil industry remain
dominated by the state petroleum companies, with very few inroads to
date by international oil majors. However gradual liberalisation and
growing demand will offer new projects and supply opportunities,
particularly to the smaller non-state companies already established in
Coal will continue to be the major source
of energy for power in China, although its use in major cities is
now being discouraged for environmental reasons. Demand for
transportation fuels, particularly jet fuel and diesel, will continue
to grow strongly as the economy develops. The markets for these fuels
will also gradually liberalise and there will be increasing
opportunities for independent terminals and supply.
Over the past few years there has been a
rapid growth in the supply and infrastructure for natural gas in China.
Natural gas is the most attractive fuel for households and businesses
as it is environmentally clean and convenient, and cheaper than all
other fuels except coal. Gas represents only 5 per cent of China's
energy portfolio, compared with 25 per cent for gas in Europe.
The government plans to double the domestic natural gas production to
over 200 billion cubic metres per year by 2015, including 10 billion
metres per year of coal bed methane. Future gas demand will also
be met by imports of gas through pipeline and LNG carriers.