The Government Placed a Cap at 61% of Total Requirements for The End of The Economic Plan

China's dependence on foreign crude oil and refined oil products is set to increase, but the government has placed a cap at 61% of total requirements for the end of the current five-year economic plan in 2015, according to a new government blueprint for energy development. 

The foreign oil dependence will be an increase from 26% seen in 2000 and 57% in 2011, the government said in its 12th Five Year Plan (2011-2015) for energy development released late Wednesday. 

The country's crude production capacity will still be 200 million mt/year (4 million b/d) in 2015, unchanged from 2010. 

Instead, refinery capacity will increase significantly. The country will develop three large-scale refinery hubs along China's eastern coast in the Bohai area, Yangtze River Delta and Pearl River Delta. It will also accelerate development of 10 million mt/year refinery complexes in Zhenhai, Zhejiang, Huizhou, Luoyang, Henan and Xinjiang through upgrades and expansions. 

In addition, foreign investment and resources will be used to help develop projects in Tianjin, Caofeidian industrial zone in Hebei, Taizhou, Zhejiang, Zhanjiang, Jieyang, Yunnan and Quanzhou. These refer to new refinery projects which involve foreign partners or will be underpinned by foreign crude sources. 

By 2015, China's refining capacity will reach 620 million mt/year (12.45 million b/d), with oil products output at 330 million mt/year, the plan said. 

In 2012, China's apparent oil demand averaged 9.68 million b/d, according to Platts calculations. Refinery runs were 9.37 million b/d while net crude imports averaged 5.38 million b/d and net oil product imports were 303,000 b/d. 

In the upstream sector, China will accelerate exploration and development of offshore oil and gas resources, with a focus on the deepwater. 

During the five-year period, natural gas production capacity -- including conventional gas, coalbed methane and shale gas -- will rise an average 10.5% per year to 156.6 billion cubic meters (15.1 Bcf/day) by 2015, from 94.8 billion cu m in 2010. Actual gas production is expected to exceed 130 billion cu m/year. 

The government is targeting to discover 6.5 billion mt of new proved geological reserves of conventional oil every year, while conventional natural gas reserves are expected to rise by 3.5 trillion cu m annually. 

CBM and shale gas proved geological reserves are targeted to rise by 10 billion cu m/year and 6 billion cu m/year, respectively to 2015. Commercial production is expected to reach 20 billion cu m/year for CBM and 6.5 billion cu m/year for shale gas by then. 

Natural gas will make up 7.5% of China's total energy mix by 2015, with coal falling to around 65%. The government said it will limit the country's total annual energy consumption at 4 billion mt of coal equivalent by the end of 2015. 

In the power sector, gas-fired power generation capacity will grow 16.2% annually to reach 56 GW/year by 2015, with total power generation capacity rising 9% annually to reach 1,490 GW/year, up from 970 GW/year in 2010. 

The plan envisages the development of five main primary energy production bases in Shanxi, Inner Mongolia, the Ordos Basin as well as Xinjiang and another part of northwestern China, with total energy production capacity of 2.66 billion mt of coal equivalent, representing over 70% of China's total production capacity. 

China will also continue pricing reform in the power, oil and gas sectors through regulations, taxation and other policies, the plan said.