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Gas pipeline feasibility in spotlight

By Wan Zhihong (China Daily)
Updated: 2008-09-11 09:54

The country's largest oil and gas producer has begun a feasibility study on the third west-east natural gas pipeline, after work started on the second gas pipeline in February.

Feasibility study of China National Petroleum Corp (CNPC) should produce a preliminary plan next year, Yang Jianhong, deputy director of the oil and gas pipeline department at the China Petroleum Planning and Engineering Institute, was quoted by the 21st Century Business Herald as saying.

The pipeline will start from the Xinjiang Uygur autonomous region and will end in Fujian province, supplying natural gas to the energy-hungry Yangtze and Pearl river deltas, Yang said. The two other pipelines do not cover Fujian.

CNPC could not be reached for comment yesterday. Company sources said earlier "the plan for the project is still at a very early stage as the company just started building the second gas pipeline in February".

Analysts said the project will be a similar length to the 9,102-km second gas pipeline, but it needs more investment due to higher raw material costs.

The nation's second west-east natural gas pipeline, with total investment of 142.2 billion yuan, comprises a main line and eight sub-lines.

With a gas transmission capacity of 30 billion cu m a year, it will cover 12 provinces and autonomous regions before reaching the eastern municipality of Shanghai and southern Guangdong province.

The company's first project to pipe natural gas from western to eastern China went into commercial operation at the end of 2004. It runs from Xinjiang's Tarim Basin to Shanghai.

That pipeline has already supplied 42 billion cu m of natural gas to the eastern region. That's a saving of 54 million tons of coal and 21 billion kWh of electricity, CNPC said on its website.

It has also changed the energy structure of Shanghai. In 2002, natural gas accounted for just 0.9 percent of Shanghai's total energy consumption, but in 2007 the figure was 4 percent.

China wants to raise the proportion of natural gas in its total energy consumption to 5.3 percent in 2010 from 2.8 percent in 2005, as it tries to curb pollution. Analysts said the pipelines will be pivotal to reaching this target.

In line with the government push to use more clean energy, the CNPC is doing more to develop natural gas. The company's natural gas production has grown 20 percent for the past three years.