China’s National Energy Administration has issued a draft natural gas utilisation policy for public comment, it said on Thursday.

The draft proposes measures to improve how natural gas is priced, including through the implementation of a mechanism to link upstream and downstream gas prices, as well as differential gas pricing policies for regions of the country with large seasonal differences in demand.

It also reiterates demands on local governments to improve the reliability of gas supply by trying to accelerate the construction of gas infrastructure and calling on suppliers and users to agree long-term supply contracts.

The draft policy designates priority users, which include city gas users such as hospitals and schools, as well as setting limits on consumption by others including some rural “coal-to-gas” clean heating projects.

The proposal follows previous reforms to the country’s gas market and pricing this year, such as liberalising residential sales pricing for city-gas distributors.
Source: Reuters (Reporting by Andrew Hayley; Editing by Himani Sarkar and Barbara Lewis)