China begins exploiting gas in the South China Sea. Towards energy independence
According to state media, China has started construction on the second phase of its first independently operated ultra-deep marine gas field, which could be an important source of natural gas for the Greater Bay Area.
Aiming to drill 12 wells, the second phase of the Shenhai-1 project, located 200 km off the coast of southern China's Hainan province, will boost the block's annual peak production from 3 billion to 4.5 billion cubic meters , accounting for 90 percent of Hainan's natural gas consumption in 2021, the China National Offshore Oil Corporation (CNOOC) said on Friday.
The project will further promote the construction of a trillion cubic meter gas cluster in the South China Sea and contribute more to the dual carbon transformation of the Guangdong-Hong Kong-Macau Greater Bay Area and Hainan Freeport,” he said. declared Wang Dongjin, president of the state energy giant, as reported by Xinhua.
The dual carbon goal refers to Beijing's commitment to peak carbon emissions before 2030 and carbon neutrality by 2060. China sees natural gas as a transitional energy source, as it shifts from traditional fossil fuels to renewable energies.
For the Greater Bay Area, the project is a critical replacement for dwindling offshore gas supplies and expiring pipeline contracts, and will improve the reliability of the region's energy system, said Baihui Yu, senior analyst at S&P Global . “The new supply will also replace some of the more expensive gas sources, such as gas from Central Asia. It will improve the energy self-sufficiency rate of the region, which relies heavily on [liquefied natural gas] imports and pipelines,” said Yu.
Zha Daojiong, a professor of international studies at Peking University, said gas from the Shenhai-1 field will likely be sent via pipeline to Hainan Island for consumption, unless it produces volumes large enough to warrant the liquefaction.
“If it is liquefied, then, for good reason, the Greater Bay Area stands a good chance of benefiting in the form of increased investment in the city's gas infrastructure,” Zha said.
"Of course, this in turn can generate jobs and skills in the gas industry chain."
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The project faces a number of technical difficulties, including the depth of the water – nearly 1,000 meters – as well as high temperature and high pressure, according to CNOOC. The drilling depth, up to 5,000 meters, is significant by international standards, Zha said. "If it were to succeed and become commercially viable, the Chinese company would have a good chance of winning oilfield servicing contracts in other countries," Zha said.
Despite efforts to boost domestic production, China is heavily dependent on natural gas imports, both through pipelines and in liquefied form, with the import dependency exceeding 40%, according to data from the National Bureau of Statistics and the General Administration of Customs.
The Shenhai-1 field is located within Chinese territorial waters and is not the subject of disputes with other countries bordering the South China Sea. The US Energy Information Administration estimates that there are 11 billion barrels of oil reserves in the South China Sea and 190 trillion cubic feet of natural gas reserves, based on proven and probable reserves.
The Shenhai-1 field development addresses China's two priorities: energy self-sufficiency and cleaner energy, Yu said. China has no qualms about seeking energy autonomy, despite growing ties with Russia.
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The article China begins to exploit gas in the South China Sea. Towards energy autonomy comes from Scenari Economici .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/la-cina-inizia-a-sfruttare-il-gas-nel-mar-cinese-meridionale-verso-lautonomia-energetica/ on Wed, 11 Jan 2023 14:34:43 +0000.