Hong Kong (Platts)--15Jan2010/558 am EST/1058 GMT

China has called on its power producers and related departments to boost supply of coal and natural gas by hiking production and imports as the country faces severe winter weather and resulting power shortages, the official Xinhua news agency reported Thursday.

In a meeting held Wednesday with the power industry's watchdog State Electricity Regulatory Commission and the country's power transmission and distribution mammoth State Grid Corporation of China, Chinese Vice Premier Li Keqiang said that more efforts were needed to improve coal output and supply, optimize power production and management, ensure oil and gas supply, and improve energy transmission, Xinhua reported.

Li stressed that stable energy supply was key to social and economic stability, Xinhua said.

Officials with the country's top economic policy planner, the National Development and Reform Commission, the transport ministry, the railway ministry, work safety commission, as well as power and energy producers also took part in the meeting.

China has suffered from an unusually early and severe winter, which started in November and reached its height in early January with heavy snow and freezing temperatures across vast terrains. Waters in the northern Bohai Bay and eastern Yellow Sea were frozen.

The prolonged cold snap caused a surge in demand for coal, power, and natural gas for power generation and heating, which in turn has resulted in coal and power supply shortages. The icy weather has strained China's power grid, with the eastern city of Shanghai and the provinces of Jiangsu, Shandong and Hubei cutting power to some areas as they rationed electricity, according to reports by Chinese state media this month.

The country's onshore natural gas producers PetroChina and Sinopec have all increased their output to meet the spike in gas consumption by the residential sector.

PetroChina, the dominant gas supplier in China, has raised daily production of its gas fields in the northwestern Shaanxi and Inner Mongolia regions, such as Changqing, Jingbian, Yulin, and Sulige, in the past few weeks.

The Changqing gas field in the northwestern Ordos Basin has been producing at its full capacity of more than 65 million cu m/day starting January. Changqing accounts for about 45% of PetroChina's marketable gas output.

China has also begun receiving gas imports from Turkmenistan since the beginning of this year via a 30 Bcm/year dual-pipeline system, which connects the Turkmen-Uzbek border city of Gedaim and runs through central Uzbekistan and southern Kazakhstan before reaching Korgas in China's northwestern Xinjiang autonomous region.

PetroChina also imported its first LNG cargo -- a 65,000-mt spot cargo from Russia -- in early January because of the strong demand for natural gas.

PetroChina has no long-term LNG import agreements and while it is building several LNG receiving terminals it has yet to complete any. In order to secure LNG import capacity, the oil giant signed a short-term lease with Chinese state offshore producer CNOOC, which has operational terminals, for capacity at the Shanghai LNG terminal in mid-November 2009.

--Winnie Lee, winnie_lee@platts.com