Beijing Shivers as Natural Gas Import Delay Turns Down Heat

Updated on
  • Liquefied natural gas shipments hampered by fog, wind: CNPC
  • Public buildings in capital ordered to reduce heating

Beijing ordered offices to cut heating to as low as 14 degrees Celsius (57 Fahrenheit) in response to a natural-gas shortage that resulted from import delays by PetroChina Co.

Gas supplies have dwindled in northern China as heavy fog and wind delayed unloading tankers carrying liquefied natural gas imports meant to satisfy peak winter demand, PetroChina’s parent, China National Petroleum Corp., said on its website. Heating in public buildings including offices, malls and supermarkets in the capital was curtailed and authorities are working with PetroChina to restore deliveries as soon as possible, Beijing authorities said in a Dec. 26 microblog post.

“I can feel that the temperature inside has been lower the past two or three days,” said Rose Du, 28, who works at front desk of Seasons Place, a shopping mall in the capital’s Financial Street area. “I have to use heating pads to keep my hands warm. Usually, I don’t need them.”

Northern China is feeling the lowest temperatures in 64 years, leading to an increase in natural gas consumption, according to CNPC. China cut prices for the fuel last month for business and industrial users in areas including Beijing, Shanghai and Guangdong as it seeks to reduce a reliance on coal and address pollution, according to the National Development and Reform Commission, the country’s economic planner.

Continued Tightness

"The cold weather and difficulties in delivering LNG imports at the Tangshan terminal played a big part in causing the recent supply shortage," Liu Guangbin, an analyst with SCI International, a Shandong-based researcher, said by phone. "I expect the tightness to continue for a month or so as the coldest time for northern China is yet to come."

The gas shortage comes after a week of heavy smog that forced the government to raise pollution advisories to their most severe level, prompting school closures, traffic restrictions and factory operation limits. Tianjin, located near PetroChina’s Tangshan LNG terminal, issued its highest air pollution alert because of smog that covered much of northern China.

Colder Inside

The CNPC statement didn’t say when the LNG cargoes would be expected to unload. A PetroChina spokeswoman declined to comment further. Two phone calls went answered to the general line of the Beijing Municipal Commission of City Administration and Environment.

Beijing’s outside temperature was 2 degrees Celsius at 4:30 p.m. local time, up from minus 6 degrees on Sunday. Public buildings should keep the indoor temperature no higher than 14 degrees Celsius, the Beijing Municipal Public Utility Emergency Office said in a statement Dec. 25.

"I feel pretty cold today and I’m already wearing an additional coat" inside the office, said An Na, who works at LM Wind Power, a company that makes blades for wind turbines. The temperature at her office in the Wangjing Soho complex, in the northeast Beijing, feels two or three degrees colder than usual, she said.

CNPC, the nation’s largest gas producer, will maximize domestic production and tap underground storage tanks to meet demand, it said in the statement. The country’s LNG purchases are down 1.6 percent in the first 11 months of the year, according to the country’s Customs General Administration. Natural gas demand grew at 2.1 percent in the first half of the year, compared with 8.9 percent and 13.1 percent in the same periods in 2014 and 2013, respectively, according to the National Development and Reform Commission.

— With assistance by Haixing Jin, Feifei Shen, and Jing Yang

Before it's here, it's on the Bloomberg Terminal. LEARN MORE