Analysis of China’s Natural Gas Use Policies and Suggested Reforms

Before the Shaan-Jing natural gas pipeline began operation in 1997, China’s only gas pipeline to reach a length of over 350 km was the Hong Kong offshore gas pipeline (Yacheng–Hong Kong, 778 km). Owing to the lack of cross-regional gas pipelines, natural gas in China was characterised by being produced in nearby fields. At that time, the two most important markets for natural gas were Sichuan and the North East. The Sichuan Basin has a long history of developing natural gas and already has a highly developed network of pipelines. The North East gas fields can produce high-quality oil-associated gas. The main uses of natural gas are primarily in the chemical industry, where it is used to produce methanol and fertilisers.