In the wake of a surge in natural gas chemical projects across China's major gas-producing regions, Shaanxi Province—long known for its abundant natural gas reserves—has been forced to revise its development strategy. According to a report from the Shaanxi Provincial Development and Reform Commission on February 9, the province has decided not to introduce any new natural gas chemical projects during the "Eleventh Five-Year Plan" period. All five proposed projects have now been put on hold.
Historically, natural gas chemical projects have served as a key driver for economic growth in Shaanxi. However, recent challenges in natural gas supply have forced a reevaluation of these plans. Last year, a nationwide shortage hit several regions, with Shaanxi also facing tight supply conditions. Despite having proven reserves of 744.7 billion cubic meters, most of the gas fields in the Changqing Oilfield are already operating at full capacity, with production rates increasing by over 10% annually. This has led to significant pressure on the existing infrastructure and made it difficult to meet rising domestic and external demand.
As a result, many gas-consuming enterprises have had to reduce their operations. In response, Shaanxi has revised its approach, shifting away from natural gas-based chemical projects. The province plans to invest RMB 1.8 billion in a 520,000-ton-per-year methanol project in Xianyang City, but part of the project will be adjusted to use coal instead of natural gas. Several other projects, including a 25,000-ton 1-4 butanediol plant, a 150,000-ton acetic acid facility, and a coal tar hydrogen production unit in Yulin, have either been canceled or restructured.
Additionally, plans for expanding methanol production at Lutianhua have been scaled back. Meanwhile, Xi’an is considering revising its clean vehicle development strategy, prioritizing natural gas vehicles based on national gas allocations. The pace of gas station construction may slow, while efforts to promote alternative fuels like methanol, ethanol, and dimethyl ether will be accelerated.
This strategic shift means that all five planned natural gas chemical projects under the "Eleventh Five-Year Plan" have been suspended, leading to a projected reduction in investment of 5 billion yuan. Officials emphasize that while natural gas offers high energy efficiency and low pollution, its limited short-term supply makes it impractical to support large-scale chemical projects without compromising regional gas security. Zhu Hongren, deputy director of the National Development and Reform Commission’s Economic Operation Bureau, has repeatedly stressed the need for a comprehensive assessment of regional gas availability, supply stability, and future demand trends before approving new projects.
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