Shou Xiaoli:

Two last questions.

China Daily:

The global energy supply and demand situation has been grim and complicated since last year, leading to energy supply shortages and drastic price fluctuations. What measures has the NEA adopted to ensure domestic oil and gas markets remain stable? Thank you. 

Zhang Jianhua:

Thank you for your question. The Central Economic Work Conference in 2022 pointed out that major enterprises, especially State-owned enterprises, should take the lead in efforts to ensure supply and keep energy prices stable. The NDRC and the NEA have worked with departments, local governments, and enterprises to deal with the drastic fluctuations in the international energy market since the Russia-Ukraine conflict. We have made stepped-up efforts in the following aspects:

First, based on clear market expectations at the beginning of 2022, we have controlled the growth rate of natural gas consumption appropriately and regularly. By doing so, we have prevented large-scale imports of spot LNG products at high prices, while also avoiding the possibility of exacerbating the turmoil in the international market, contributing to our efforts to ensure a stable global market.

Second, we have made great efforts to discover more untapped reserves, and increase production, to ensure supply and maintain the stability of prices. In 2022, China's natural gas production increased by over 10 billion cubic meters, the sixth consecutive year the country has maintained such growth. As the import demand for natural gas is declining, the natural gas self-sufficiency rate, therefore, increased by almost 3 percentage points year on year.

Third, we have made greater efforts to build a new type of energy system with multiple energy sources complementing each other. Coal has been used as an emergency back-up source of power in industrial production or power generation during off-peak hours to reduce the use of natural gas. By doing so, we have ensured that natural gas is used to provide heat for residential homes during the heating season, which is our top priority. 

Fourth, we have ensured that centrally administered state-owned enterprises in the oil and gas sectors play a major role in maintaining stable supplies and prices. We have implemented a comprehensive pricing method for the “resources pool” of oil and gas products, which considers prices of domestically produced products, those of the long-term import contracts, and a small amount of the imported spot products. In this way, we have been able to ensure stable prices. 

Fifth, we have formulated lists of projects every year since we start to build our energy production, supply, storage and marketing systems. As such, greater efforts have been made to improve our oil and gas pipeline networks and gas storage facilities, with an average annual increase of 100 million cubic meters per day in our supply capacity over the past five years. We have overcome the bottleneck in oil and gas infrastructure capacity since the heating season in 2021. The infrastructure is capable enough to ensure abundant energy supplies during this year's heating season, thus ensuring supplies in terms of total amount and demand during peak hours as long as there are enough resources. Thank you.