Recovery to propel oil, gas consumption

Stable prices, supply

Zhou Xiwei, an economist with the institute's energy strategy research department, said China's oil and gas industry managed to ensure energy supply and stabilize prices last year, providing strong support for domestic economic growth despite the severe and complex changes in the international energy situation.

Domestic energy companies, including CNPC, China National Offshore Oil Corp and China Petrochemical Corp (Sinopec), have stepped up domestic oil and gas exploration and exploitation in recent years to boost output, while expanding international oil and gas exploration and trade to secure adequate energy supply, she said.

CNPC said its oil and gas output hit new records in 2022, with crude production reaching 105 million tons and natural gas output hitting 145.3 billion cubic meters. Natural gas accounted for 52.4 percent of the company's total production measured by oil and gas equivalent, it said.

CNOOC's oil and gas production also touched a record high last year, hitting 120 million tons of oil equivalent, with domestic crude oil and natural gas production up by 3.39 million tons and 2.7 billion cubic meters year-on-year, respectively. The increase in crude oil production accounted for over 60 percent of the country's total increase, it said.

The company's overseas oil and gas production rose to 46.24 million tons of oil equivalent in 2022 as it continuously strengthens international energy cooperation while optimizing asset layout in countries and regions participating in the Belt and Road Initiative, it said.

CNOOC currently owns 43 assets in 22 economies and the proportion of oil and gas production in the BRI region has increased to 31 percent of total overseas oil and gas production.

China imported 508 million tons of crude oil last year, with an import dependency rate of 71.2 percent. It imported 152.07 billion cubic meters of natural gas last year, with an import dependency rate of 40.2 percent, said the China Petroleum and Chemical Industry Federation.

The federation said it expects China's oil import dependency rate to remain at around 70 percent in the medium to long term.

According to the federation, while growth in domestic refining capacity slowed last year, with a total refining capacity of 924 million tons per year, China still maintains its position as the world's largest refiner.

Ethylene production capacity has grown rapidly for the fourth consecutive year, with a total production capacity of 49.53 million tons per year, surpassing the United States and rising to the top spot globally, it said.

Sinopec, the world's top refinery by capacity, aims to lift crude throughput by 3 percent year-on-year in 2023 as it expects domestic demand for refined products and chemicals to grow rapidly on an overall upturn in domestic economic performance.

The refiner targets processing 250 million tons, or 5.03 million bpd of crude, in 2023, up 3.2 percent from realized throughput of 4.88 million bpd in 2022, but below the 5.14 million bpd in 2021.

While ensuring energy security will remain the primary task this year and growth in crude oil and natural gas production in 2023 will be maintained, Zhou of the CNPC institute said China will also continue to add more renewable power generation capacity this year with a focus on deeper integration of solar and wind power to the grid.

The China Electricity Council, a trade body of power producers, said installed solar and wind capacity will exceed hydropower for the first time in 2023. It expects China to add nearly 100 gigawatts of solar capacity to reach 490 GW in 2023, which will be the largest solar capacity added in a single year compared with around 85 GW of capacity added in 2022.

The council also expects China's wind capacity to reach around 430 GW in 2023, a growth of around 61 GW from 2022. In comparison, the capacity additions were 71 GW in 2020, 48 GW in 2021 and 40 GW in 2022.

China will add about 45-50 GW of coal-fired generation capacity in 2023, and around 200 GW of renewable capacity, according to Caroline Zhu, senior analyst with S&P Global Commodity Insights.

In recent years, China accounted for roughly 44 percent of additional global renewable capacity and more than 73 percent of Asia's renewables capacity addition. This trend is expected to continue in 2023, she said.