China Goes N2N – Natural Gas to Nuclear

The claim that China’s economy is “increasingly driven by clean technologies,” doesn’t match the reality. According to the latest Statistical Review of World Energy, hydrocarbons provided 88% of China’s total energy needs last year, that’s slightly above the global average of 87%. The US gets 83% of its energy from hydrocarbons.

 

As shown above, China got 21 times more energy from coal, oil, and natural gas last year than from solar and wind. If, as Ember claimed a few months ago that China is “reshaping the global energy landscape,” it sure is taking its sweet time about it. Coal alone provides more than 14 times as much energy to the Chinese economy as wind and solar combined. That inconvenient fact didn’t get a mention by Ember.

Xi has made it clear that he wants China to be self-sufficient in energy, food, and strategic elements, declaring, “The energy rice bowl must be held in our own hands. Increased gas production is a central part of Xi’s “rice bowl” strategy.

Over the past decade or so, China’s biggest national oil companies have spent heavily on gas exploration and production. Much of their drilling has focused on increased production of shale gas. In August, Sinopec announced a huge shale gas discovery in the Yongchuan field in the Sichuan Basin that brings the proven reserves in that area to 148 billion cubic meters, or about 5 trillion cubic feet. China is one of only four countries in the world that produce gas from shale. (The others are the US, Canada, and Argentina.)

 

The push to increase domestic gas production has yielded positive results. Over the past decade, gas production in China has been growing at an annual rate of more than 6%. The graphic above shows that, excluding coal, China’s energy growth story since 2010 has been the extraordinary rise in natural gas production. In 2024, China’s gas production totaled 8.9 exajoules (EJ). That was nearly three times the amount of energy China derived from solar, which totaled 3 EJ.

Surging domestic gas production is reducing China’s need for LNG. Thanks to surging shale gas production and increased imports from Russia via the Power of Siberia pipeline, China’s LNG imports are plummeting. In September, China’s LNG imports were 15% lower than in September 2024, and they are down 17% so far in 2025.

Last week, an energy industry veteran who recently visited China told me that in response to Trump’s tariffs, Chinese energy companies have become very reluctant to make any deals that result in increased imports from the US and other Western countries. Instead, China wants to rely on domestic gas and Russian gas. Proof of that came in September during Vladimir Putin’s visit to Beijing, when Putin and Xi agreed to build the Power of Siberia 2 pipeline. When completed, that project will further reduce China’s need for LNG imports.

 

The graphic above provides a higher-resolution view of the growth of natural gas and nuclear in China. N2N is leaving solar and wind in the shade.

More gas is coming. In February, China National Petroleum Corporation drilled an ultra-deep borehole that reached 10,910 meters (35,768 feet) in Xinjiang. It is the deepest vertical well ever drilled in Asia. The well, Shenditake 1, was drilled with a rig designed and built by CNPC and used almost all Chinese parts. The well was dubbed a “scientific exploration project” by Chinese media. That may be true. But it’s also clear that the project is part of a long-term effort to increase oil and gas production from the Tarim Basin, which contains more than 80% of China’s deep oil resources and more than 60% of its deep gas resources. The well proves that Chinese firms can handle complex drilling projects and wells that operate at very high temperatures and pressures, and they can do so without the help of Western outfits like Halliburton and SLB (formerly known as Schlumberger).

Now let’s look at nuclear. The IEA’s latest World Energy Outlook projects that global nuclear power capacity will increase by about 75% between now and 2050. The report says that “China leads the way, having steadily built up its nuclear supply chain to enable it to deliver a stream of new reactor projects.”

Since 2022, China has been approving about 10 new reactors per year. Last year, Beijing announced it would build 11 new reactors at an estimated total cost $31 billion. In April of this year, China’s state council approved the construction of 10 more reactors at an estimated cost of $27 billion. Today, according to the World Nuclear Association, China has 58 operating reactors with a total capacity of 57 GW.

This week, concrete was poured for a reactor at the Zhaoyuan site in Shandong province. That reactor will be the first of six HPR1000 (Hualong One) units to be built at the site at a cost of about $17 billion. That’s a remarkable number. Why? Remember, Georgia Power spent about $36 billion to build two reactors at Plant Vogtle, and the construction of those two reactors took about 10 years. Shandong Zhaoyuan Nuclear Power Company says it will build six reactors for half of what Georgia Power paid to build two reactors!

Further, the Chinese firm is claiming it will take about five years to build each of the Hualong units. The Hualong is a pressurized water reactor with an output of about 1,100 MW. It is a key part of China’s strategy to lower deployment costs by using standardized designs, repeat builds at multi-unit sites, heavy reliance on domestic manufacturing for large components, and a stable year-to-year build-up.

 

About 63 nuclear reactors are now under construction around the world. Of that number, 29 are in China. In its World Energy Outlook, the IEA noted that China “is on track to become the world’s largest nuclear power operator around 2030.” Further, in its recent five-year plan, the Chinese government set a target of having 200 GW of nuclear capacity online by 2035, and it could have as much as 400 GW online by 2050! For comparison, the US now has about 97 GW of nuclear capacity.

I’ll conclude with two points. First, China is embracing N2N more than any country on the planet. It is doing so because N2N works. Natural gas and nuclear projects have very high power density. That means they have small footprints and need fewer material inputs (steel, copper, concrete, etc.) than weather-dependent forms of generation. Furthermore, they are affordable, dispatchable, scalable, low- or no-carbon, and the technologies are mature.

Second, the US has a significant lead over China and the rest of the world when it comes to natural gas. It must now work like hell to catch up with China on nuclear.