Zhang Guobao, a former director of the National Energy Administration and head of the expert advisory committee at the National Energy Board, highlighted during the Energy Forum at the 3rd Global Think Tank Summit that the energy sector presents vast investment opportunities in the future. According to rough estimates, energy infrastructure alone will require trillions of yuan in investment, and he remarked that this figure is likely conservative. He emphasized that the energy industry is set to become a key area for new investments.
Zhang pointed out that with the current overcapacity in manufacturing, finding new investment areas has become a challenge. In his view, energy is the most promising field for future growth. Investments in energy, especially in power grid upgrades, could unlock significant economic potential. However, he noted that the existing grid faces many challenges, including high debt levels and technical shortcomings. One major issue is the problem of wind power curtailment, which is largely due to the grid's inability to support renewable energy effectively.
Recently, the National Development and Reform Commission raised the non-residential natural gas price to 1.95 yuan per cubic meter from 1.69 yuan. Zhang Guobao commented that even with this increase, the price remains unprofitable for importers. He explained that the cost of LNG imported into China is around $16–$18 per million BTU, with recent imports from Qatar reaching as high as $20 per million BTU—equivalent to about 5 yuan per cubic meter. This is far above the downstream price of less than 2 yuan, creating a significant price disparity that leads to heavy losses for gas importers.
China has long faced high gas prices, but the rise of cheap shale gas in the U.S. offers a potential alternative. The U.S. Department of Energy predicts that the U.S. could become a net natural gas exporter by 2020. Last year, U.S. shale gas production reached 180 billion cubic meters, surpassing China’s annual consumption of 140 billion cubic meters. During his visit to the U.S., Zhang observed that several newly built LNG terminals have been converted into export facilities, and shale gas producers are pushing the government to allow exports to high-priced markets.
Despite the price advantage of U.S. shale gas compared to traditional LNG sources, Zhang noted that the U.S. lacks the necessary infrastructure, such as pipelines, export terminals, and LNG carriers, to immediately boost global supply. To date, only two applications for LNG exports have been approved by the U.S. Department of Energy. Therefore, it may take two to three more years before U.S. shale gas significantly impacts global gas markets.
Wang Jiuling, vice president of China Southern Power Grid, also stressed the importance of energy prices in driving economic development. Under globalization, energy costs play a critical role in determining the competitiveness of industries across countries and regions. He called for greater efforts to reuse waste energy from conventional sources, emphasizing the need for efficiency and sustainability in energy use.
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