Nomura Research is even more optimistic, forecasting syngas to account for 35% of China’s total gas supply by 2020. It estimates the price of syngas production to average $7-$8/Mcf, much cheaper than the expected $13-$17/Mcf for imported gas and LNG, which would trigger much faster development of syngas projects, particularly in China’s western regions, which are rich in coal.
The central government has started encouraging synthetic coal gas production and PetroChina and Sinopec have inked collaboration agreements with the local government in western Xinjiang province. Sinopec is developing two massive cross-country pipelines, each with 30 billion cubic meters/year of capacity, to transport synthetic coal gas produced by local coal companies in the province to China’s eastern coast.
Synthetic gas from coal will reduce China's air pollution and emissions.
China's importing of coal from the United States causes U.S. coal prices will rise. This will cause U.S. utilities to switch even more of their electricity production from coal to natural gas, further reducing U.S. emissions of carbon dioxide.
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