China's energy market will 'continue to optimise' in favour of natural gas, says industry veteran

As China faces up to lower economic growth, its energy consumption will continue to “optimise”, according to one of the country's most senior oil and gas industry figures.

Speaking at the OPEC International Seminar in Vienna, Austria on Wednesday, Fu Chengyu, who recently retired as chairman of Chinese state behemoth Sinopec, said: “China’s economy is entering a new phase with industrialisation nearing completion.”

He noted the country would have to contend with annual growth that has fallen from nearly 10% to just about managing 7%.

“Invariably, this has implications for China’s oil and gas imports, but also for its wider energy mix which would optimise. I see us moving away from coal, to the benefit of natural gas players.”

Chengyu opined that while oil demand would not accelerate as much, China could well be importing nearly 10% more natural gas on an annualised basis than it currently does by 2020.

“All of this will have to be squared up with relatively medium-to-low growth.”

The former Sinopec chairman also described China’s deal to import natural gas from Russia as being good for market diversity.