China has big appetite for natural gas

China will continue to drive the world demand for natural gas in the next few years, according to a petroleum industry expert.

Shan Weiguo, director at the CNPC (China National Petroleum Corp) Research Institute of Economics and Technology, addressed fellow executives at CERA (Cambridge Energy Research Associates) Week on Wednesday.

Executives from top Chinese energy companies such as CNPC, Sinopec and State Grid Corp of China attended the annual CERAWeek forum in Houston from March 5-9.

The annual world conference for energy executives has been held in the Texas city since 1983. More than 3,000 people attended this year.

The main theme was "Checking Point: Strategy for the New Energy Future". Energy leaders discussed the turning points for the price of oil, technology innovation and US energy policy.

Shan said that China's demand for gas in 2017 had grown by 17 percent, a significant jump from the 6 percent increases the previous two years. While future growth may not necessarily reach double digits, China's demand will grow because of China's policy of using more gas and less coal to combat pollution.

LNG (liquefied natural gas)-exporting companies pay close attention to China's demand because of the size of its market. Predicting future demand is crucial for them.

At the conference, the International Energy Agency (IEA) released its outlook for the petroleum market. The report said that oil demand will continue to rise over the next five years. Half of the demand growth will come from China and India alone.

The report found that China will need 700 million tons of oil by 2025, with domestic production capacity at 200 million tons. That means China will need to import 500 million tons of oil, a big market for the world's energy industry.

As the US imports less crude oil going forward, China will import more from areas including the Middle East, Africa, Central Asia and Latin America. The report cautions that geopolitical risk in some of the regions should be a concern when it comes to China's energy policy.

China not only will continue to drive the world energy demand but also leads the world in renewable energy development and innovations, said Lu Ruquan, an energy strategy scholar with CNPC.

Lu said the world oil industry is trying to change its current model to adapt to a new world where big data, blockchain and artificial intelligence are reshaping business. CERAWeek created innovation experience lab to showcase current progress in the field.

China's innovation in energy, especially in developing electric vehicles (EV) had gained wide attention at CERAWeek.

"With US President Trump's return to conventional industries, people were a bit surprised to discover that the real actions in energy innovation are mostly happening in China. GE executives have acknowledged at the conference that its EV business is primarily in China," Lu said.

Zhang Jingyu contributed to this story.