OREANDA-NEWS. April 19, 2011. China's natural gas shortage may end from 2015 when sizable imports begin to flood the country, a researcher with top Chinese oil and gas firm China National Petroleum Corporation (CNPC) said.

Domestic production of the fuel will trail demand by 40 billion to 80 billion cubic metres (bcm) by 2015, up from a deficit of some 25 billion cubic metres in 2010, according to Xu Bo, a researcher with CNPC's Research Institute of Economics and Technology.

The shortage will remain steady from 2015 to 2020 as domestic production of nonconventional gas increases and gas demand from the chemical sector moderates due to government policies, Xu said on the sidelines of an industry confernece in Beijing.

He said China would import some 66 bcm of pipelined gas and 43 bcm of liquefied natural gas in 2015 and more than double those amounts by 2020, keeping the market oversupplied.

But he cautioned the demand-supply equation could be tilted if Chinese gas suppliers and consumers think expensive foreign supplies are unaffordable.

Xu said CNPC made a loss in selling Turkmenistan gas to China and that the shortfall could widen this year as import volumes increase and prices rise in line with oil prices under a quarterly price adjustment scheme.

The overall gas selling price by PetroChina , CNPC's listed arm, was 1.29 yuan a cubic metre in 2009, while import costs for Turkmenistan gas amounted to over 2 yuan a cubic metre when the fuel reached the Chinese border in northwestern Xinjiang, Wang Guoli, a official with PetroChina's planning institute, said.

China's only pipelined gas imports are from Turkmenistan. Import volumes from the central Asian country are scheduled to increase to some 17 bcm this year from around 4 bcm in 2010.

CNOOC, China's leading liquefied natural gas developer, also reportedly faced difficulties in selling Qatari gas in southern China due to high import costs.