Over $16.3bn in capital expenditure (capex) will be spent by China-focused operators on gas projects over the next four years to ensure that the country’s production will remain around 16.7 billion cubic feet per day (bcfd) in 2021, according to GlobalData.

China National Petroleum Corporation will drive China’s gas production with 63.5% share of all production in 2021. China Petrochemical Corp and China National Offshore Oil Corporation follow with 24.8% and 5.5% respectively. China has three key upcoming gas projects; all three are scheduled to start production by 2021. China National Offshore Oil Corporation will lead in greenfield gas projects, with participation in three upcoming projects in the near future. The rest of the participants have one upcoming project each.

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China is expected to spend $16.3bn as capex on conventional gas projects between 2018 and 2021, with spending topping out in 2018 at $7bn. Average full cycle capex per barrel of oil equivalent for China gas projects is $10.80. Conventional gas projects have full-cycle capex of $10.40/boe, while unconventional gas projects and CBM projects need $13.60 and $9.10 per boe in full cycle capex respectively. Shallow water projects have an average full cycle capex of $11.80 per barrel of oil equivalent, followed by onshore and deepwater projects with an average full cycle capex per boe of $10.90 and $8.50 respectively. New gas projects average $9.10 per barrel of oil equivalent in capex.

The average development break-even price for gas projects in China is about $7 per thousand cubic feet (mcf).  Shallow water projects require a gas price of $8 per mcf to break even, while the onshore and deepwater projects have a development break-even price of $7 and $6 per mcf respectively.

Top planned and announced gas projects in China

Source: GlobalData Upstream Analytics

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