Analysis Report on Shanghai Pipeline Natural Gas (PNG) Market

Shanghai Gas (Group) Co., Ltd. almost monopolizes Shanghai Natural Gas distribution, and supplies the service of infrastructure construction of natural gas transmission system and gas storage equipment, production and sales of artificial coal gas, bulk purchases & sales of Natural Gas, etc. Shanghai has established complete pipeline transmission network and infrastructure. Presently, Shanghai has two major Natural Gas sources: Pinghu Lake of East China Sea Natural Gas, West-East Gas Pipeline. The consumption of Shanghai natural gas reached 2.4 billion cubic meters in 2006, wherein, pipeline natural gas (PNG) was in majority, taking up 99% of total amount. It is anticipated that the consumption of natural gas will reach 2.9 billion cubic meters in 2007. Compared with other gas, PNG has the advantages of low price, stable supply, easy to maintain, no pollution and high safety. As the environment protection attracts more and more attention, the demand for natural gas will be greater. Currently the natural gas supply is far behind the demand. Shanghai will not only establish pricing system of natural gas and increase the natural gas price properly, but also expand the supply to relieve tensional situation.