China's natural gas output continues to rise, up 12.3% in 2008

BEIJING, Jan. 31 (Chinese media) -- China's production of natural

gas rose 12.3 percent year on year to 76.1 billion cubic meters in 2008 as the

government promoted cleaner energy, an industry association said.

The annual growth rate was down from 23.1 percent in

2007, the China Petroleum and Chemical Industry Association (CPCIA) said.

China consumed 67.3 billion cubic meters of gas in

2007, an annual increase of 19.9 percent, according to statistics from BP.

This compared to 55.6 billion cubic meters in 2006,

up 21.6 percent from the previous year. Consumption figures for 2008 are

unavailable.

China's production and consumption of natural gas

have been rising steadily since the government set a target of raising the

proportion of natural gas in total energy consumption to 5.3 percent by 2010

from 2.8 percent in 2005.

The plan was aimed to shift away from a heavy

reliance on coal, which accounts for about 70 percent of total energy

consumption.

The expansion of the natural gas infrastructure,

including pipelines, reflected the rapid increases in output and consumption,

the CPCIA said.

In 2008, China launched construction of the second

east-west gas pipeline and the connection of Central Asia gas pipeline.

The new pipelines are scheduled to become operational

by the end of 2009 and will have an annual capacity of 30 billion cubic meters.

They will mainly carry natural gas from Central Asia to the Yangtze and Pearl

River deltas, the country's two most developed regions.

Construction of more liquefied natural gas terminals

were also launched last year, while LNG purchase agreements were signed between

state oil producers and foreign LNG sellers, including Shell, Total and Qatar

Gas, despite higher natural gas prices driven by record oil price hikes in 2008.

Those agreements would add a possible annual imports of more than 8 million

tons.