China's oil and gas output has exceeded 400 million tons in 2024, underscoring the role of innovative extraction methods and strategic planning in reshaping the country's energy landscape. This milestone not only represents a significant increase in production volume but also signals a broader shift in China's approach to energy security and environmental commitments, with implications that will ripple through international markets.
One of the key factors driving this transformation is China's emphasis on domestic exploration and production (E&P). Following Chinese leader Xi Jinping's instruction in 2018 to increase domestic E&P, the three major national oil companies (NOCs) released their first-ever seven-year plans to intensify E&P in 2019-2025. This strategic push has led to a 43% increase in domestic gas production by these NOCs from 2018 to 2023, setting new production records last year.
Technological breakthroughs have also played a critical role in boosting China's natural gas production and consumption. For instance, four new technologies aimed at facilitating energy transition, emission reduction, and deepwater or deep-seated reservoir exploration have been highlighted in China's latest Natural Gas Development Report. These advancements align with China's emphasis on independent research, design, and production of key equipment to mitigate the risks of potential Western technology export bans.
Furthermore, China's natural gas consumption is expected to continue growing, albeit at a slower pace than in previous years. The report projects that China will consume 420-425 billion cubic meters (bcm) of gas in 2024, an increase of 6.5-7.7% over 2023. Domestic gas production is anticipated to reach 246 bcm, while imports are predicted to rise to 174-179 bcm.
According to the International Energy Agency (IEA), China's broader energy strategy aims to peak CO2 emissions before 2030 and achieve net zero by 2060. The IEA notes, "Reaching a peak in China's CO2 emissions before 2030 relies on progress in three key areas: energy efficiency, renewables, and reducing coal use".
Sources:
Rising Production, Consumption Show China is Gaining Ground in Its Natural Gas Goals
https://www.iea.org/reports/an-energy-sector-roadmap-to-carbon-neutrality-in-china/executive-summary
China's Energy Production Milestone 2024
China's Energy Production Milestone 2024
China has achieved unprecedented energy production levels in 2024, with its combined oil and gas sector showing remarkable growth across multiple fronts. The country's crude oil output has increased, with a notable contribution from offshore oil production, leading to an overall gain of 2% year-on-year to 4.2 million b/d in 2023, a figure that further underscores the potential for continued growth in 2024.
Natural gas consumption in China has also seen a significant boost, expected to rise by 6.5 to 7.7 percent year-on-year in 2024, reaching a total of 420-425 billion cubic meters. This growth is partly due to the increasing sales of LNG-fueled heavy-duty trucks, which surged by 104 percent in the first half of 2024 compared to the same period in 2023. The country's domestic gas production reached 232.4 bcm in 2023, marking a 5.6% increase from the previous year.
In the realm of electricity production, China has hit an impressive peak of 907,420 GWh in August 2024, a new record high. Clean energy has played a pivotal role in this achievement, with solar and wind energy generation increasing significantly.
According to a report, "solar generation rose 41TWh from 53TWh in May 2023 to 94TWh in May 2024," underscoring the rapid growth of clean energy sources in China's power mix. Zhou from CNOOC also highlighted the importance of natural gas in future production, stating that "after 2025, the main growth will come from gas," emphasizing the strategic shift towards cleaner energy sources.