China's Sinopec plans to produce over 30 Bcm natural gas in 2020

China Petroleum & Chemical Corp, or Sinopec, said it plans to produce more than 30 Bcm of natural gas in 2020, marking an increase of just 1.1% from its output in 2019.

The company’s gas production in 2019 was at 29.67 Bcm, a jump of 7.2% from the prior year.

Sinopec churned out a total 21.87 Bcm of natural gas over the first three quarters this year, 0.2% lower than the same period last year, the company said, without offering a reason behind the slowed output growth in 2020.

“Amid low oil prices situation, natural gas has become a significant growth point of profit margins in the company,” it said in a statement, adding that its investments on natural gas production capacity and development costs were decreasing.

The projected gas output is seen helping the company offset some of the hefty losses it incurred from paying higher prices for gas imports than the current market value.

An executive from the company said last month Sinopec had boosted spot purchases of LNG at low prices during the January-September period, which helped cut losses on its gas imports business.

Sinopec also aims to raise the share of natural gas in its energy production portfolio to more than 50% in 2023, when its gas production capacity would reach 40 Bcmpy. The share was 41% in 2019.

The firm recently announced it had added 83 Bcm of newly proven natural gas reserve at Chuanxi field and some 192 Bcm of certified new reserve at its shale gas project Fuling in the Sichuan basin in southwestern China.

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