The entry of China to the gas market: constraints and opportunities

Abstract

In the next 20 years, China will emerge as a major importer of gas and thus shape the energy exchanges and markets in Asia. But different constraints must be overcome. The increase of natural gas share in the Chinese energy balance will depend on the country's capacity to create a unified gas market in place and instead of the fragmented exchanges. This implies several economic and institutional reforms (such as the energy price reform). One important element that will determine the growth of the Chinese gas industry concerns the role of international investors. The growth of the Chinese gas demand would lead to a radical change in the country's energy policy, which up until now has been dominated by the search for self-sufficiency. From this point of view, the question of the choices of the main gas suppliers is essential concerning the Chinese energy security. Different countries are in competition. But the choices of the main suppliers are very linked with the way in which China perceives its integration at the international level and in the Asian region.