Oil and Gas Industries
China
Overview
Unit: Million metric tons
| Crude Oil/Natural Gas | 2004 | 2005 | 2006 | 2007 (Estimated) |
| Total Market Size | 291.27/40.98 | 299.57/49.95 | 307.28/53.10 | 175/66.38 |
| Total Local Production | 174.06/40.98 | 180.84/49.95 | 168.42/53.10 | 175/66.38 |
| Total Exports | 5.49/0 | 8.07/0 | 6.34/0 | n/a |
| Total Imports | 122.7/0 | 126.8/0 | 145.2/0 | n/a |
| Imports from the U.S. | Limited | Limited | Limited | n/a |
Sources of Data: China Customs. The above figures are mainly from China Customs, but represent unofficial estimates for Oil and Gas equipment, technology, and services for oil and gas exploration, production, and transmission projects. Total exports refer to most of the low-end equipment and products. No accurate figures are available.
China now ranks No.2 in world energy consumption (behind the United States, ahead of Japan). Economists predict that by 2020, China’s GDP will be USD 4 trillion and the consumption of China’s oil and gas will be about 5 billion barrel of equivalence (BOE). The Chinese government continues to push through reform and industry restructuring measures in order to encourage the necessary investment needed to meet energy demand growth. This trend of high demand growth is also dominant in the natural gas sector.
Natural gas is the fastest growing fuel in China's energy mix. Natural gas consumption in China is expected to rise to over 10% by 2020 in light of increasing LNG imports as well as domestic discoveries. From 2006 to 2020, China's natural gas infrastructure construction will involve a CNY 220 billion investment. The Chinese government is continuing its efforts to create a more transparent gas environment to encourage investment by creating a gas law and appropriate downstream gas regulations.
On the oil side, China became a net importer of crude oil in 1996. Imports are expected to rise from 1.7 million barrels/day in 2001 to 4.2 million barrels/day in 2010, and to 9.8 mb/d in 2030. China continues to focus on the development of domestic oil resources throughout the country. Increased oil exploration and development activity are moving west and will be focused on the Tarim, Junggar, and Tu-Ha Basins. At the same time, currently producing oil fields have been on the decline for over a decade. As a result, the domestic supply of oil will be insufficient in meeting demand forecasts. Thus, there will be an increased reliance on imported oil in the future, especially on sources of crude oil from the Middle East.
China's liberalized finished oil products retail market is expected to bring deregulated prices and lower entry barriers to its domestic players. Three months into the official opening of the wholesale market, the top question is how to win the gas station wars and outpace the greater downstream competition in China?
U.S. companies are taking in providing advanced technologies in upstream and downstream oil and gas construction and development. Many Chinese end-users have favorable opinions of American products and are eager to do business with American companies. China’s booming natural gas industry will spur the demand for single space related products, equipment and engineering services. “American” equipment has a reputation for technological excellence and quality. Innovation, automation, and precision make U.S. equipment and technology superior to that of its competitors.
Best Products/Services
LNG Carriers
China will build at least 30 LNG carriers over the next 10 years to transport LNG from abroad. Several Chinese shipyards are already capable of constructing LNG carriers. Chinese officials expect the shipyards to be able to build more than 10 carriers per year by 2015.
Equipment:
· Containment LNG Tanks
· Insulation systems
· Resilient blanket to reduce perlite pressure
· Cryogenic piping and insulation systems
· Recondenser
· High pressure pumps
· Vaporizers
· Vapor recovery systems
· Instrumentation and control systems
· Low temperature, low-pressure valves: ball, gate, globe and butterfly valves for LNG applications.
· Automatic welding equipment
· LNG trunk-line system
· LNG Compressors and Engines
Equipment for Infrastructure Construction
· Loading and discharging ports
· Jetty: Unloading arms, suspended deck
· LNG peak-shaving plant
· Equipment for trunk-line system construction
Other Related Equipment
· LNG transportation trucks or tank cars
· LNG gasifying stations and relevant equipment
· Small-sized natural gas liquefying equipment: for natural gas stations and LNG vehicles
· LNG cold power utilization technology and equipment
· Compressors
· Expanders
· Pumps
· Heat exchangers
Related Materials
· 9% nickel
· Perlite for keeping low temperature
· Semi-automated UT inspection (SAUT) for 9% nickel steel
In many of the equipment listed above, U.S. LNG equipment manufacturers are especially well received in the global LNG industry due to consistently superior quality and performance.
Opportunities
As major consumption countries, China and the U.S. face the risk of supply shortage and sharing substantial expenses to import oil. Since a steady oil supply is needed to maintain rapid and sustainable economic growth, U.S. and China should strengthen cooperation in the following fields:
Exploration & Production: complicated onshore blocks;
deep-water offshore blocks;
gas fields: in marine deposit area of China and the third countries
LNG projects: LNG liquefaction, LNG transportation, LNG-receiving terminal construction
Theoretical & technological research on the oil and gas industries
Exploration and development of high sulfur content gas fields: complex conditions in northeast Sichuan pose severe challenges to technology, specialty management and HSE. In the northeast Sichuan Basin, the matching technologies for their exploring and developing high sulfur gas pools are incomplete. China needs technology and service in the following areas:
- Predication technique for steep-structure carbonate oolite-beach reservoirs
- Drilling techniques for high sulfur gas pools
- Anti-corrosion technique
- Technique in preventing sulfur deposits
- Downhole sampling technique
- Sewage re-injection techniques
- Experience in developing and constructing high sulfur gas fields and purification
plants
- On-site production and operation experience with gas fields and purification
plant
- Organization and management experience with the production of high sulfur gas
fields
- Insufficient specifications and codes concerning development of high sulfur gas
fields
- High HSE requirements
U.S. can take the lead in establishing a strategic oil reserve system involving member and non-member countries of IEA to optimize and sharing of oil reserve and maintain world economic stability.
Resources
Major Shows
CIPPE 2007
The China International Petroleum & Petrochemical Technology and Equipment Exhibition
Date: April 3-5, 2007
Venue: Beijing Exhibition Center, China
CIPPE: organized by Zhenwei Exhibition Service Company, is an annual trade show. CIPPE is China's largest trade show in the Oil & Gas and Petrochemical industry sectors. Reportedly, over 430 exhibitors participated in CIPPE 2006, of which half were foreign firms. At CIPPE 2006, The U.S. Embassy Commercial Section arranged a U.S. pavilion of 36 standard booths (9 square meters for a standard booth). Four U.S. exhibitors from our U.S. pavilion also made use of the CIPPE's seminar sessions and delivered technical presentations to interested audiences.
CIPPE 2007 again promises to be a great opportunity for American firms to showcase their products & services in this sector. The U.S. Pavilion will offer prospective U.S. exhibitors the following services: streamlined booth arrangements, market entry counseling, and logistics liaison with Chinese organizers, etc. For general information about this trade show and the U.S. Pavilion, please refer to the following contact information:
Contact: Ms. Cindy-Ling Wang (for the U.S. pavilion)
T: 86 10-85296655 ext.851
F: 86 10-85296558
Email: ling.wang@mail.doc.gov
Website: http://www.buyusa.gov/china/en/cippe2006.html or http://www.cippe.com.cn
China Petroleum & Gas Summit 2007
Date: March 22-23, 2007
Venue: Shangri-La hotel Beijing, China
Contact: IBG Company Limited
Add: UnitB, 7/F, Zhao Feng Universe Building, No.1800, West Zhong Shan Road, Shanghai
T: 86-21-64401600
F: 86-21-51062045
Email: blake.tsao@ibgintl.com
CIGTE
The 8th China International Gas Technology and Equipment Exhibition
Date: April 4-6, 2007
Venue: Beijing Agricultural Exhibition Center
Contact: Mr. Wang Hong Guo
Tel: 86 10-85861238
Fax: 86 10- 85866179-21
Mobile: 13910617799
Email: qifal1238@126.com
The 2nd China Offshore Oil&Natural Gas International Summit 2007
Date: April 2-3, 2007
Venue: Hotel New Otani Chang Fu Gong
Contact: Mr Zhao, Mr Gu
Tel: (86-21) 52360030
Fax: (86-21) 52360029
E-mail:luke.Shang@globaleaders.com / Alex.gu@globaleader.com
China Offshore Oil&gas Exhibition 2007 Date: March 15-17, 2007
Venue: Tianjin Binhai International Exhibition Center
Contact: China Promotion Ltd.
T: 86-10-87730641
F: 86-10-87730640
Email:cpbj@cpbjlf.com
Website: www.cpexhibition.com
Shanghai International Petroleum & Petrochemical and Natural Gas Exhibition Date: March 15-17, 2007
Venue: Shanghai Everbright Exhibition Center
Contact: Shanghai Pudong International Exhibition Company
T: 86-20-50812626
F: 86-21-50582115
Email :postmaster@ep.sh.cn
Website: www.sippe.com.cn
The 6th China(Dalian) International Oil Processing & Chemical Industry Exhibiton 2007 Date: May 23-25, 2007
Venue: Dalian Xinghai Convention & Exhibition Center
Contact: Zhang Hong Ling
T: 86-411-82644428
F: 86-411-82645808
Email: zhanghongling.8@126.com
Website: zhanghongling.8@126.com
The 4th Xinjiang International Petrolem & Petrochemical and Chemical Products Exhibition Date: June 6-8, 2007
Venue: Xinjiang International Trader Center
Contact: Wangping
T: 86-01-64465648, 64465654
F: 86-01-64465648
Email: xinjiangwp@126.cc
Key Websites:
Pipeline and Valve:
Petroleum and Petrochemical Equipment:
CS China Contacts:
Beijing Office:
Tel: (86-10)8529-6655
Fax: (86-10)8529-6558/9
David Murphy
Wang Ling
Shanghai Office:
Tel: (86-21)6279-7930
Fax: (86-21)6279-7639
Eric Hsu
Stellar Chu
Guangzhou Office:
Tel: (86-20)8667-4011
Fax: (86-20)8666-6409
Lena Yang
Chengdu Office:
Tel: (86-28)8558-3992
Fax: (86-28)8558-3991
Cui Shiyang
Shenyang Office:
Tel: (86-24)2322-1198x8142
Fax: (86-24)2322-2206
Liu Yang