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The National Development and Reform Commission (NDRC) published its
policy on utilizing natural gas yesterday, the Beijing Youth Daily
reported today.

The document is aimed at relieving the tension between natural gas
supply and demand, optimizing natural gas consumption structure, improving
energy efficiency and cutting pollutant emissions as well. All
activities using natural gas in China will have to follow this policy.

NDRC categorized natural gas usages into four purposes: urban fuel,
industrial fuel, electricity generation, and the chemical industry.

Meanwhile, considering comprehensive social, environmental and economic
benefits, the utilization of natural gas falls into four categories:
preferred, permitted, restricted, and forbidden.

Urban fuel gas appears in the preferred category. Meanwhile, methanol
made from natural gas, base-loaded natural gas electricity power
stations, as well as liquefied natural gas projects fueled by large and medium
gas field are all listed in the forbidden category.

With respect to projects consuming natural gas which have already been
built, their supply will remain at current level. State approved
fertilizer projects are also guaranteed with a long-term and stable supply.

For areas severely short of natural gas supply, coal is the recommended
substitute for natural gas if it is feasible.

For projects using natural gas under construction or already licensed,
if a contract has been inked between the buyer and supplier of natural
gas, the contract will be executed as it is agreed on. There will
otherwise be no exceptions to the policy for new natural gas projects or
natural gas fields.

By HaoZhou