China's unconventional gas production will climb sharply to 2030 to help meet the country's growing demand for gas, but China will have to boost its imports over the next decade, says a study by Wood Mackenzie.

Although China's conventional gas supply will continue to grow, it cannot keep pace with future demand during this decade, and China will need to secure additional volumes of imported gas in the form of both LNG and piped gas through 2020, the study says.

WoodMac forecasts that China's demand for LNG in 2020 will be 46M tons/year, up from its previous forecast of 31M tpy.

Gavin Thompson, director of the study, noted that development of indigenous unconventional gas is currently slow, but large volumes of coalbed methane, coal-based synthetic gas and shale gas will enter the market, reaching more than 11 bcfd by 2030, which will meet much of China's incremental demand.

With strongest growth occurring before 2020, China's gas demand is forecast to rise to 43 bcfd in 2030 from 9 bcfd in 2009, a compound annual growth rate of 7.5%.

A combination of factors is driving China's gas demand growth, Thompson notes, including policies to reduce the country's growing reliance on oil imports.

"This is important as the gas-demand story is about displacing oil products, not coal, in the industrial and residential sectors. Coal continues to dominate in power, though gas will increase its market share in wealthier coastal provinces. . .As such, we think that industry will remain the largest gas consumer in China through to 2030," Thompson said.

The study concludes that potential suppliers of gas to China must rapidly engage with domestic buyers to secure contracts while the market is still available, because in the longer term, unconventional gas production will constrain requirements for new LNG imports.

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