China National Petroleum Corp, the State-owned energy giant, is planning to ramp up oil and gas output to more than 200 million metric tons of oil equivalent this year, while looking to raise the share of natural gas output to a record high of 50 percent.
The company announced the annual goal during its work conference for 2020 held on Tuesday in Beijing. It plans to invest 5 billion yuan ($726 million) this year on oil and gas exploration.
Natural gas capacity at CNPC's Tarim Oilfield and Southwest oil and gas field will exceed 30 billion cubic meters, while shale gas production will surpass 11 billion cubic meters, it said.
CNPC said natural gas production increased 8.6 percent year-on-year in 2019, registering the highest growth in five years, while crude oil production reversed from a decline in four consecutive years, without revealing details.
The oil and natural gas output of its Changqing Oilfield, China's largest oil and gas field, reached 57.01 million tons of oil equivalent in 2019, including 41.23 billion cubic meters of natural gas.
Industry experts said CNPC's goal reflects Chinese oil and gas companies' surging interest in natural gas development, to cope with the country's commitment to environment protection, and the slowdown in oil consumption growth.
Statistics from the National Development and Reform Commission showed China's consumption of natural gas rose 9.5 percent year-on-year to 246.28 billion cubic meters between January and October last year.
Over the same period, consumption of refined oil was 275.16 million tons, up 1.9 percent year-on-year, while crude oil output rose 1.2 percent year-on-year to 159.29 million tons.
"For CNPC, as well as other oil and gas companies, China's increasing appetite for natural gas provides an alluring new growth momentum, when oil consumption growth has slowed down," said Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University.
Natural gas accounts for only about 8 percent of primary energy consumption in China, while the country's energy development plan for the 13th Five-Year Plan (2016-20) period pledged to source respectively 10 percent and more than 15 percent of primary energy consumption from natural gas and non-fossil energy by the end of this year, to expand clean and renewable energy in its energy mix, according to Lin.
Strengthening natural gas development is a practical choice that meets the country's energy upgrade demand, and the company's pursuit for new growth when oil consumption growth is no longer as fast as in the past, he said.
Li Li, research director at energy consulting company ICIS China, said strengthening natural gas development is necessary for China's oil and gas companies from the perspective of both production and demand.
It is relatively easier to boost natural gas production than crude oil production, due to China's lack of resources, while demand for natural gas has maintained steady growth, she said.