China turns up gas heat in 3.29m more homes

Beijing

CHINA has switched another 3.29 million households to gas heating this winter, Reuters calculations show, more than it added last year, as Beijing continues to push the use of cleaner fuels to curb pollution.

Gas heating has been installed in recent months across a new swathe of northern China - known for its heavy smog - underlining the government's commitment to reduce pollution even after last year's efforts triggered a fuel shortage that left people freezing in their homes.

The new gas users will require an additional 4.53 billion cubic metres (bcm) of gas in the Nov 15 to March 15 period, but analysts said the increase would not necessarily boost overall consumption in the country.

"If China wants to deliver gas as promised to households, it will sacrifice industrial supplies," said Chen Zhu, managing director of consultancy SIA Energy.

Last year's surge in gas demand combined with inadequate storage and insufficient infrastructure to cause a supply crunch that pushed prices to record levels just weeks into the heating season, forcing Beijing to pause its clean-fuel campaign.

This year, a warmer-than-usual November, slack industrial demand and higher supplies of liquefied natural gas (LNG) have pressured wholesale gas prices.

China's energy majors also bought more supplies ahead of the heating season, with November gas imports via pipeline and ship hitting a record. Even so, China is unlikely to meet the additional demand from the new users, without cutting some supply to industry, Mr Chen noted.

Reuters calculated the number of new households that switched to gas boilers by subtracting the number of new electricity users reported by State Grid - China's dominant grid operator - from the total new households reported as using clean fuels by the Ministry of Ecology and Environment.

An additional 1.5 million homes will use electricity for heating, the numbers show, after Beijing proposed electric power as an alternative to gas for cities in the Fenwei Plain.

The Fenwei Plain includes parts of Shanxi and Shaanxi, two of China's biggest coal-producing provinces, as well as Henan. Cities in the Fenwei Plain were included by Beijing as a "key battlefield" in its war against air pollution in July, in addition to 28 other cities in northern China.

China's top steel-making province, Hebei, and top coal-producing region Shanxi were most aggressive in switching to gas heating, while homes in Beijing and Shaanxi province added more electricity than gas.

Chen Hao, a resident of Xi'an, capital of Shaanxi province, said he doubted whether local households earning an average of 3,000 yuan (S$598) a month could afford the extra 500 yuan in winter heating bills after switching to gas.

Some people will also still burn coal, after local governments relaxed an outright ban on coal for heating in places not connected to gas supplies. "This winter, village officials are under pressure to keep us warm," said an elderly farmer surnamed Liu living in Zhangjiapu village in Shanxi province. Last year, Mr Liu survived the winter without heat. REUTERS