China's production of natural gas rose 12.3 percent year on year to 76.1 billion cubic meters in 2008 as the government promoted cleaner energy, an industry association said.

The annual growth rate was down from 23.1 percent in 2007, the China Petroleum and Chemical Industry Association (CPCIA) said.

China consumed 67.3 billion cubic meters of gas in 2007, an annual increase of 19.9 percent, according to statistics from BP.

This compared to 55.6 billion cubic meters in 2006, up 21.6 percent from the previous year. Consumption figures for 2008 are unavailable.

China's production and consumption of natural gas have been rising steadily since the government set a target of raising the proportion of natural gas in total energy consumption to 5.3 percent by 2010 from 2.8 percent in 2005.

The plan was aimed to shift away from a heavy reliance on coal, which accounts for about 70 percent of total energy consumption.

The expansion of the natural gas infrastructure, including pipelines, reflected the rapid increases in output and consumption, the CPCIA said.

In 2008, China launched construction of the second east-west gas pipeline and the connection of Central Asia gas pipeline.

The new pipelines are scheduled to become operational by the end of 2009 and will have an annual capacity of 30 billion cubic meters. They will mainly carry natural gas from Central Asia to the Yangtze and Pearl River deltas, the country's two most developed regions.

Construction of more liquefied natural gas (LNG) terminals were also launched last year, while LNG purchase agreements were signed between state oil producers and foreign LNG sellers, including Shell, Total and Qatar Gas, despite higher natural gas prices driven by record oil price hikes in 2008. Those agreements would add a possible annual imports of more than 8 million tons.

(Xinhua News Agency February 1, 2009)