January 15, 2010 / 2:18 AM / 9 years ago

RPT-UPDATE 1-China encourages coal,gas imports in power shortage

(Repeats to additional subscribers) (Adds comment on power shortage outlook in Q1 in para 7-11) SHANGHAI, Jan 15 (Reuters) - The Chinese government is encouraging more coal and natural gas imports as part of an effort to increase supply of energy and counter power shortages across the country, the official Xinhua News Agency reported.

The report did not give any details on measures to spur imports.

Chinese vice premier Li Keqiang also urged coal mines to adhere strictly to fulfilling supply contracts and stressed safety in coal production.

He called for the acceleration of coal transport to replenish coal stocks in China’s power plants ahead of the Lunar New Year holiday in mid-February.

Provinces and regions should coordinate on power transfers to keep power outages and rationing to a minimum, Li also said.

On the demand side, power supplies should be reduced for energy-intensive and high-emitting plants, as well as plants in industries with excessive production capacity, Li said. China’s industrial activities have been roaring back, pushing the total power consumption in 2009 up nearly 6 percent from a year earlier, the official China Securities Journal reported on Friday, quoting the China Electricity Council.

Power consumption in chemical, nonferrous metals and equipment manufacturing industries rose sharply in December to record highs, Xue Jing, a senior analyst at the council was quoted as saying.

Regional power shortages are likely to stay through the first quarter due to booming power demand, restrained rail transportation around the Lunar New Year holiday, rising coal costs and seasonal low hydropower supply, the paper said.

The high power demand is unlikely to abate before March, although afterwards it might ease as the government takes on excessive production capacity in certain industries and the overheated real estate sector, Xue said.

Meanwhile, coal transportation has to compete with the travelling crowds around the Lunar New Year, traditionally a peak time for family for family reunions, and some coal mines may reduce or close shop when their workers return home for the holiday. (Reporting by Rujun Shen and Jacqueline Wong; Editing by Jonathan Hopfner)

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