PetroChina Doubles Down on Natural Gas

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State-controlled Petrochina -- China's largest producer and importer of natural gas -- says it will strive to meet growing demand for the fuel in the world's most populous country. "We will hike the production of domestic gas to limit gas imports and we will import more low-cost gas," CFO Chai Shouping told an earnings conference call on Thursday. While natural gas has fallen out of favor with policymakers in much of the developed world because of its role in global warming, Chinese national oil companies continue to promote it as a "bridge" to low-carbon energy. PetroChina -- the main Hong-Kong listed subsidiary of China National Petroleum Corp. (CNPC) -- expects China's gas consumption to hit 185.6 billion cubic meters in the second half of this year. During the first half of this year it estimates that consumption amounted to 182.7 Bcm -- up 17.4% from the same period of last year. The company predicts demand will grow at an annual rate of 7%-9% in 2021-25, which is in line with China’s national economic plan. In March of this year it had forecast annual growth of 5.7% in 2021-25. But PetroChina is facing higher prices for imported gas. After reporting a rare 3 billion yuan profit on gas imports in the first quarter of this year, it suffered an 8 billion ($1.2 billion) loss on gas imports in the second quarter. Chai said the company would seek to pass on the rising costs to customers. PetroChina's domestic gas production rose 7.2% to 11.93 billion cubic feet per day in the first half of this year, while its domestic oil output rose 1.1% to 2.07 million barrels per day. Company Foresees Strong Oil Prices, Chinese Economic Growth The company sees oil prices averaging $65-$70 per barrel this year and remaining in a $50-$70/bbl range next year, which it regards as sufficient to support its exploration and production efforts. Chai said China's economic growth should exceed 8% this year, adding that the country's consumption of refined petroleum products had returned to pre-pandemic levels in the first half of the year. PetroChina -- the country's second-largest refiner after Sinopec -- sees domestic demand for products growing by an average of 1.2% in 2021-25, with moderate growth for gasoline, a rebound for jet fuel, and steady to slightly lower consumption of diesel. China's consumption of refined products has grown at a slower rate in the past few years as the market has matured (IOD Jul.30'21). PetroChina’s New Energy Strategy: Eyes All Opportunities A year ago PetroChina became the first Asian national oil company (NOC) to announce plans to become carbon neutral by around 2050 (IOD Aug.27'20). It also became the first of China's trio of big NOCs to announce a three-phase transition plan in March of this year (IOD Mar.25'21). But PetroChina and CNPC Chairman Dai Houliang had no new substantial information to share on Thursday about issues such as capital spending targets for renewables or hydrogen, although he did say a detailed plan was being prepared. Such plans are expected from major state-controlled companies in the second half of this year or in 2022, as the National Development and Reform Commission puts the finishing touches to the country's 2021-25 energy plan, and possibly augments that with medium-term, and long-term plans. Maryelle Demongeot, Singapore PetroChina H1'21 Results (billion yuan) H1'21 H1'20 %Chg. Revenue 1,197 929.05 29.80% Net Profit 53,037 -29.98 -- Capex 73.89 74.76 -1.16 Upstream Operating Profit 38.87 10.35 275.56 Refining Operating Profit 13.46 -13.64 -- Chemicals Operating Profit 8.73 3.10 181.61 Natural Gas and Pipeline

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