OREANDA-NEWS. August 22, 2012. China’s natural gas production edged up 0.60 percent from June to hit 8.25 billion cubic meters in July, according to figures released on Monday by the National Bureau of Statistics (NBS).

Gas production in July grew at a slower annual rate than in June, which recorded a year-on-year increase of 2.9 percent. The falling growth rate is due to the natural decline of aging gas fields in the Xinjiang Uyghur Autonomous Region, said Lu Ying, a senior analyst with oil market service provider oilgas.com.cn.

A number of major onshore fields in China are in decline after decades of production, and operators typically cap output to prolong the field’s lifespan. Further exploration and development of aging fields requires significant investment but upstream producers lack economic incentive to do so due to low gas prices, Lu told.

Some fields in southwestern China’s Sichuan Province are also struggling to boost gas output after years of service, Lu said, adding that China National Petroleum Corp.’s (CNPC) Changqing field in Shaanxi Province is now driving China’s gas production growth.

Output from Changqing, one of China’s largest gas fields, in the first half of 2012 rose 11 percent from a year earlier to 14.5 bcm, or an average 79.67 million cubic meters per day, the official Xinhua news agency reported earlier this month.

Changqing is expected to produce 29 bcm in total this year, an engineer with the field’s operator, PetroChina Changqing Oilfield Co., told Interfax in April. Changqing accounted for more than a third of the 75.5 bcm of gas CNPC produced domestically in 2011, and is forecast to output 33 bcm/y by 2013.

China produced 61.77 bcm of gas in the first seven months of this year, up by 5.5 percent from the same period last year, the NBS said.

The NBS did not disclose consumption and import figures for July, but Lu forecast imports to grow slightly from June due to domestic demand.

Imports have climbed since the first quarter this year and may continue to do so in July, Lu said. Import growth is up this year after CNPC launched operations last year at two import and regasification terminals - Rudong in Jiangsu Province and Dalian in Liaoning Province.