Dominique Patton

China turns up gas heat in 3 mln more homes

13 Dec 2018

* New users could add 4.5 bcm of gas demand * China also switching 1.5 mln households to electric heating * Residents facing expensive heating bills By Meng Meng and Dominique Patton BEIJING, Dec 13 China has switched another 3.29 million households to gas heating this winter, Reuters calculations show, more than it added last year, as Beijing continues to push the use of cleaner fuels to curb pollution. Gas heating has been installed in recent months across a new swathe of northern China - known for its heavy smog - underlining the government's commitment to reduce pollution even after last year's efforts triggered a fuel shortage that left people freezing in their homes. The new gas users will require an additional 4.53 billion cubic metres (bcm) of gas in the Nov. 15 to Mar. 15 period, but analysts said the increase would not necessarily boost overall consumption in the country. "If China wants to deliver gas as promised to households, it will sacrifice industrial supplies," said Chen Zhu, managing director of consultancy SIA Energy. Last year's surge in gas demand combined with inadequate storage and insufficient infrastructure to cause a supply crunch that pushed prices to record levels just weeks into the heating season, forcing Beijing to pause its clean-fuel campaign. This year, a warmer-than-usual November, slack industrial demand and higher supplies of liquefied natural gas (LNG) have pressured wholesale gas prices. China's energy majors also bought more supplies ahead of the heating season, with November gas imports via pipeline and ship hitting a record. Even so, China is unlikely to meet the additional demand from the new users, without cutting some supply to industry, Chen said. POLLUTION BATTLEFIELD Reuters calculated the number of new households that switched to gas boilers by subtracting the number of new electricity users reported by State Grid - China's dominant grid operator - from the total new households reported as using clean fuels by the Ministry of Ecology and Environment. An additional 1.5 million homes will use electricity for heating, the numbers show, after Beijing proposed electric power as an alternative to gas for cities in the Fenwei Plain. The Fenwei Plain includes parts of Shanxi and Shaanxi, two of China's biggest coal-producing provinces, as well as Henan. Cities in the Fenwei Plain were included by Beijing as a "key battlefield" in its war against air pollution in July, in addition to 28 other cities in northern China. China's top steel-making province, Hebei, and top coal-producing region Shanxi were most aggressive in switching to gas heating, while homes in Beijing and Shaanxi province added more electricity than gas. Chen Hao, a resident of Xi'an, capital of Shaanxi province, said he doubted whether local households earning an average of 3,000 yuan a month could afford the extra 500 yuan in winter heating bills after switching to gas. Some people will also still burn coal, after local governments relaxed an outright ban on coal for heating in places not connected to gas supplies. "This winter, village officials are under pressure to keep us warm," said an elderly farmer surnamed Liu living in Zhangjiapu village in Shanxi province. Last year, Liu survived the winter without heat. The table below shows the number of new gas or electric heating users this year, according to data published by the Ministry of Ecology and Environment and State Grid. New New power Total Gas Power Gas household users user user consumption gas users pct pct from new users this year (in bcm) Beijing 39,000 122,600 161,600 24% 76% 0.054 Hebei 1.45 mln 319,000 1.77 mln 81% 18% 2.000 Tianjin 154,100 35,900 190,000 81% 19% 0.212 Shandong 210,000 240,000 450,000 47% 53% 0.289 Henan 598,000 300,000 898,000 67% 33% 0.824 Shanxi 601,000 62,000 663,000 91% 9% 0.828 Shaanxi 237,000 470,000 707,000 34% 66% 0.327 Total 3.29 mln 1.54 mln 4.84 mln 68% 32% 4.534 (Reporting by Meng Meng and Dominique Patton; Editing by Tom Hogue)

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