Liquefied natural gas in China: options for markets, institutions, and finance, Parts 63-414

"Aware of the increased demand for energy, the Chinese government is striving to develop a comprehensive strategy to ensure that continued economic growth is sustained by sufficient energy supplies. Energy and environmental security are driving forces of national energy policy." In an effort to meet the continuing demand of the power sector and ensure stability of fuel supply sources, the State Power Corporation asked for World Bank assistance to assess the viability of imported liquefied natural gas (LNG) as a fuel source for coastal provinces. In response to their request, the Bank undertook a detailed economic assessment of LNG as an alternative fuel source, and reviewed the steps necessary to support its introduction. This report is a result of that study. The report provides a general overview of energy demand in East China and the potential market for gas. It also assesses the fuel and gas supply options and reviews key factors for the successful introduction of LNG, including institutional, regulatory and financing issues. This report will be of interest to external banks, private companies, Chinese organizations, and Bank staff. This report presents a summary of key issues and options relating to the development of a Liquefied Natural Gas (LNG) project in China and is based on two more detailed reports (Phase I and Phase II), which discussed the market for gas and the institutional and financing issues necessary to support its introduction. The objective of the study, from which this report developed, were to examine the projected market for gas, including: demand for energy in the power and nonpower sectors, netback value of gas compared with alternative fuels, and environmental issues supporting its introduction. A second objective was to review the mechanisms and structures necessary to support the introduction of gas, including the long-term gas supply chain, institutional and regulatory structure, financing issues, and structure and final price of energy to consumers. The beginning of this report provides a general overview of energy demand in East China and the potential market for gas. This is followed by an assessment of fuel and gas supply options. The later half of the report reviews key factors for the successful introduction of LNG, including institutional, regulatory, and financing issues Annotation "Aware of the increased demand for energy, the Chinese government is striving to develop a comprehensive strategy to ensure that continued economic growth is sustained by sufficient energy supplies. Energy and environmental security are driving forces of national energy policy."In an effort to meet the continuing demand of the power sector and ensure stability of fuel supply sources, the State Power Corporation asked for World Bank assistance to assess the viability of imported liquefied natural gas (LNG) as a fuel source for coastal provinces. In response to their request, the Bank undertook a detailed economic assessment of LNG as an alternative fuel source, and reviewed the steps necessary to support its introduction. This report is a result of that study. The report provides a general overview of energy demand in East China and the potential market for gas. It also assesses the fuel and gas supply options and reviews key factors for the successful introduction of LNG, including institutional, regulatory and financing issues. This report will be of interest to external banks, private companies, Chinese organizations, and Bank staff