China’s natural gas demand continues to grow

China’s government is continuing to push for natural gas as a major energy source in order to reduce air pollution tied to coal-fired power plants, according to a U.S. government report Monday.

Natural gas accounted for only 4.9 percent of China’s total energy consumption in 2012, but that share is projected to grow to 8 percent by 2015 and 10 percent by 2020.  China’s large investment in natural gas production and infrastructure along with a growth in imports will enable that growth according to the U.S. Energy Information Administration.

The boom already has caught the eye of American companies looking to help China exploit its massive and complex shale reserves. China holds the largest reserves of technically recoverable shale gas in the world, although actually getting to the gas won’t be easy, the Energy Department agency noted.

China’s natural gas production has more than tripled since 2003, and reached 3.8 trillion cubic feet in 2012, the EIA estimated. The Chinese government has set a production target for 5.5 trillion feet of natural gas per year by the end of 2015. Most of that growth will come from large fields in north central and western regions, as well as offshore reserves in the South China sea, according to the U.S. report.

Still, China will have to import a large portion of its gas. The country’s natural gas consumption has grown at an annual rate of 17 percent since 2003, overtaking the amount of natural gas produced domestically in 2007 and reaching 5.7 trillion cubic feet in 2013. Imported natural gas met a third of China’s demand in 2013, up from 2 percent in 2006, the EIA reported.

The country has also invested in pipeline infrastructure that will link production areas with coastal regions and allow for more imports. In 2013, China imported 974 billion cubic feet of gas from Turkmenistan, Uzbekistan and Kazakhstan. In May, China finalized a $400 billion deal with Russia for the purchase and transport of eastern Russian gas through a proposed pipeline. The deal could bring as much as 1.3 trillion feet of natural gas to the country each year starting in 2018, according to the EIA report.