China Secures Natural Gas Supply Through Storage, New Sources, and Domestic Growth

China has added more underground natural gas storage capacity than any other country since 2022, the International Gas Union confirmed, pushing itself to sixth place globally and gaining new leverage over the volatile winter energy market it once feared most.

The IGU found that China added 6 billion cubic meters of new underground storage capacity, placing it behind only the United States, Russia, Ukraine, Canada, and Germany. That ranking, while still modest relative to total consumption, represents a structural shift in how Beijing manages price risk. China's underground gas storage working capacity still accounts for only 6.7% of 2023 natural gas consumption, far below the global average of 10.8% and the 26% average across Europe.

The pace of construction, however, is accelerating sharply. PetroChina has announced a plan to build six regional underground storage bases by constructing 23 new facilities and expanding 10 existing ones, targeting total working capacity of 41 bcm by 2030. PetroChina is investing $8.5 billion in the buildout, including the Jintan salt cavern cluster and conversions of depleted fields in Xinjiang. A separate transaction between PetroChina and PipeChina will add nearly 11 bcm of working gas storage capacity to PetroChina's portfolio alone.

The strategic logic is straightforward: large storage buffers convert potential supply shocks into manageable price adjustments. When underground reservoirs absorb surplus summer gas and release it through peak winter demand, Beijing can stay out of the spot LNG market during cold snaps, the precise moments when prices spike most sharply and competition with European buyers intensifies most.

Diversified pipeline imports reinforce that cushion. Gazprom's Power of Siberia delivered 38.8 bcm to China in 2025, a 24.8% jump from 2024, meaning Russia exported more pipeline gas to China than to all European countries combined, including Turkey. Central Asian pipeline sources, led by Turkmenistan at roughly 35 bcm per year, provide a separate overland supply lane that requires no tanker routes or weather windows.

Domestic production has done the most to reduce import dependence. China's domestic gas output rose 6.3% in 2025, lifting its share of total supply to 60.1% and keeping it above 55% for five consecutive years. Production climbed 7.1% year over year in November 2025 to 22.1 bcm, driven by PetroChina and Sinopec's shale operations in Sichuan, where output targets under the 14th Five-Year Plan were achieved ahead of schedule. Shale gas alone accounted for 25 bcm of total output in 2024, representing 10% of China's national gas production figure.

The global consequences extend well beyond China's borders. ING Research has described China as "a key swing factor in the global LNG market," and 2025 illustrated exactly why. China's LNG imports declined for eight consecutive months through mid-2025, down 12% year over year in June alone, easing competition for cargoes that European and Southeast Asian buyers would otherwise have contested at elevated prices.

In October 2024, PetroChina said it would strive to operationalize 11 new gas storage facilities by the end of the 15th Five-Year Plan period running through 2030, to meet anticipated demand for gas storage capacity through 2040. If those targets are met, Beijing's capacity to absorb supply disruptions without triggering cascading price moves across global gas markets will be substantially greater than it is today.