Study on the impacts of natural gas supply cost on gas flow and infrastructure deployment in China

Qi Zhang, Zhan Li, Ge Wang and Hailong Li

Applied Energy, 2016, vol. 162, issue C, 1385-1398

Abstract: The impacts of gas supply costs on interregional gas flow and gas infrastructure deployment in China are analyzed out to 2035 by using an optimization model in the present study. There two options for gas supply includes successive two-step procedures of imports or domestic productions and transportation by using infrastructures within China. Four possible supply cost scenarios are proposed considering the uncertainties of import price, domestic unconventional gas production cost and geopolitical turbulence in import source countries. The analysis results show that (1). Domestic unconventional gas production cost (wellhead price) and gas import cost (import gas price represented by CIF) are two key points to gas flow and infrastructure deployment in China; (2). The development of unconventional gas is conductive to supply cost reduction and maintenance of infrastructure deployment stability, especially to Southwest and North China regions; (3). When gas import price increases, LNG import will decrease more than pipeline import, and imported LNG will be partly replaced by pipeline import rather than domestic gas in coastal regions; (4). The disruption of gas supply from Myanmar will lead to great changes of gas flow and infrastructure deployment in Southwest China regions; (5). The infrastructures are deployed according to the optimization gas flow in different scenarios.

Keywords: Gas flow; Infrastructure deployment; Natural gas strategy; Unconventional gas; Optimization model (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (23)

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DOI: 10.1016/j.apenergy.2015.06.058

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