Legal approaches to improve China's natural gas reserve capacity

In April 2018, The Opinions on Speeding Up the Construction of Gas Storage Facilities and Improving the Market Mechanism of Gas Storage Peak-Shaving Auxiliary Services was issued by the National Development and Reform Commission and the National Energy Administration. Although mandatory gas storage indicators were set up in The Opinions, the implementation effect is not ideal. Many gas companies lack enthusiasm for increasing natural gas reserves. Thus, it is necessary and urgent to study how to improve the natural gas reserve capacity. In this regard, referring to the data of foreign natural gas reserves, based on the policy and practice of China's natural gas reserves, the basic ideas and legislative suggestions to improve China's natural gas reserve capacity were considered. First, China's natural gas reserves are so insufficient and its emergency capacity for peak shaving is so weak that promoting the marketization of gas storage services is the right way to improve gas storage capacity. Second, market competition mechanism is necessary for gas storage resources to be sold and gas storage service market pricing to be promoted, helping guide enterprises to invest in the construction and operation of gas storage facilities. Third, government functions should be given full play to ensure that enterprises fulfill their gas storage obligations through government supervision and information disclosure. Fourth, the design of policies and regulations should focus on the construction of gas storage market, and comprehensively carry out work in terms of clarifying gas storage obligations, standardizing gas supply contracts, and promoting the interconnection of pipe networks.