Energy

A lifeline from Central Asia

By Zhou Yan (China Daily)
Updated: 2011-02-17 13:57

As nation's demand grows for natural gas, 1,833-km pipeline provides a much-needed link

BEIJING - China has imported 5.8 billion cubic meters (cu m) of natural gas through the China-Central Asia gas pipeline since it started operating in December 2009.

The pipeline, one of the country's four strategic oil and gas access points, has been operating securely and steadily since it was put into use, China National Petroleum Corporation (CNPC), the major operator of the project, said on Wednesday.

The 1,833-km line, which runs through Turkmenistan, Uzbekistan and Kazakhstan to China's Xinjiang Uygur autonomous region, is the country's first large pipeline project to transport natural gas from overseas in an aim to fill the nation's surging demand for resource.

"The pipeline has yet to operate at full capacity, as it ran on trial basis in 2010, and the transportation volume this year will certainly be increased from the current level when the gas resources diversify and China's demand increases," said Duan Zhaofang, a natural-gas researcher at CNPC Research Institute of Economics & Technology.

The institute said earlier that China imported 4.4 billion cu m of natural gas through the pipeline in 2010. The monthly import volume will more than double in the first two months of 2011 from the average monthly level in 2010.

The line linking Central Asia and China is designed to transport 30 billion to 40 billion cu m by 2015, but the actual amount will depend on operating conditions, Duan said.

China, the world's largest consumer of natural gas, has ratcheted up its production and imports of natural gas to meet its rising domestic need and realize its goal to reduce dependence on dirty fossil fuels.

The nation saw a 15.8 annual growth of natural gas consumption from 2001 to 2009, followed by Iran, which had 8.2 percent growth in the same period, according to the BP Statistical Review of World Energy published in June.

CNPC projected that China's apparent consumption of natural gas, which includes domestic production and imports, but excludes exports, would hit 130 billion cu m in 2011, up 22.6 percent from last year.

The ballooning demand has led domestic producers to prepare to tap into unconventional gas resources, such as coal-bed methane.

PetroChina Co, the listed arm of CNPC, is "open to more investment from oversea oil and gas producers" to develop the domestic reserves of coal gas, according to a Bloomberg report on Wednesday.

Related readings:  Natural gas demand to soar  Natural gas consumption to increase  China completes 3rd Shaanxi-Beijing natural gas pipeline  Sinopec starts natural gas exploration in Sichuan

PetroChina produced 300 million cu m of coal-bed methane in 2010 and expected the output to hit 4 billion cu m by 2012, Jie Mingxun, president of PetroChina's coal-bed methane unit, was quoted as saying by Bloomberg.

Its parent company, CNPC, said last year that more than 10 billion yuan ($1.5 billion) will be spent on developing unconventional gas resources, without specifying the time frame.

In another development, MIE Holdings Corporation, a privately owned oil and gas producer based in Jilin province, announced on Wednesday that it signed an agreement with Kazakhstan-based independent oil and gas company BMB Munai Inc to purchase the latter's oil and gas production and exploration project in Mangistau Oblast in western Kazakhstan for $170 million.