Potential changes of regional natural gas market in China amidst liberalization: A mixed complementarity equilibrium simulation in 2030

Weidong Jia, Chengzhu Gong, Kai Pan and Shiwei Yu

Energy, 2023, vol. 284, issue C

Abstract: Ensuring the continuous efficient use of natural gas is crucial for China to achieve its carbon peak goal by 2030. This study scrutinizes the prospective effects of an intensified liberalization of China’s natural gas sector in 2030. To accomplish this, a mixed complementarity equilibrium model is employed, capturing the interdependencies among relevant sectors within the industrial chain. Multiple scenarios of liberalization are simulated, encompassing variations in gas demand, pipeline capacity expansion, and the escalation of imported Liquefied Natural Gas (LNG), to identify potential modifications. Scenario results reveal that the insufficient capacity of long-distance pipeline network will significantly hinder the distribution of gas resources and cause a shortage of gas supplies in Eastern region. Furthermore, the expansion of pipeline capacity from Northwest to East is beneficial in low demand scenario, while increasing the receiving and transfer capacity of LNG in Northern and Eastern regions is crucial in face of strong demand growth. Moreover, a decline in LNG imports will put upward pressure on regional prices, and further affect the security of natural gas supply. The findings will offer critical data for policymakers and present a diversified view of natural gas liberalization market under China’s peak carbon emission target in 2030.

Keywords: Natural gas; Liberalization reform; Market modeling; Mixed complementarity; Simulation (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:284:y:2023:i:c:s0360544223026488

DOI: 10.1016/j.energy.2023.129254

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