Workers at a construction site in Luoyang, Henan province that is part of China's West-East gas pipeline project. Zhang Xiaoli

Liu Fang, a Shanghai resident, usually prepares breakfast for her family at 7 in the morning. "I can easily finish my cooking in 10 minutes using natural gas," said the 50-year-old housewife.

The gas Liu cooks with comes from the Xinjiang Uygur autonomous region, about 4,000 km to the west.

The Liu family is one of the more than 4 million households in Shanghai benefiting from China's first West-East gas transmission pipeline, completed in 2004.

The 4,000-km project crosses 10 provinces, autonomous regions and municipalities, linking Xinjiang's gas-rich Tarim Basin to Shanghai.

The line has a designed capacity of 12 billion cu m a year and provides natural gas, which can be a relatively clean source of energy, to over 200 million people in China.

China started building the country's second West-East gas pipeline, the largest of its kind in the world, in 2008. The project included one trunk line and eight sub-lines, with a total length of 9,102 km, and 142.2 billion yuan of investment.

The project will cross 14 provinces, autonomous regions and municipalities. It will carry 30 million cu m of natural gas every year from Central Asia and Xinjiang to eastern and western areas including Shanghai and Guangdong.

The pipeline will greatly boost natural gas consumption in China, said Wu Hong, an official with China National Petroleum Corp (CNPC), builder of the project. "Once the project comes into operation in 2011, China will raise the ratio of natural gas in its total primary energy consumption by 1 to 2 percentage point."

Using natural gas from the project, as opposed to coal, could reduce carbon dioxide emissions by 130 million tons a year and sulfur dioxide emissions by 1.44 million tons a year, said Wu.

Construction of the second West-East gas pipeline is in line with China's continuous efforts in clean energy use and environmental protection, said Zhou Dadi, a researcher with the Energy Research Institute of the National Development and Reform Commission (NDRC). China plans to increase natural gas use to 5.3 percent of its total primary energy consumption. The figure is currently around 3 percent.

Oil and gas pipelines are safer and more economical and convenient than other transportation methods, said Han Xiaoping, a veteran analyst in Beijing. "China will see booming development in the sector in the next few years."

The country will speed up construction of a series of oil and gas pipelines to increase transmission capacity, according to a three-year National Energy Administration blueprint for China's oil and gas industry. Several key projects, such as the China-Kazakhstan crude oil pipeline, the Lanzhou-Zhengzhou-Changsha refined oil pipeline, the China-Myanmar oil and gas pipeline and the Shaanxi-Beijing natural gas pipeline will get specific attention.

China has around 50,000 km of oil and gas pipelines. The country will build around 150,000 km of pipelines over the next 12 years and in the 12th Five-Year Plan period (2011-15) it will build 40,000 km of pipelines, according to CNPC, the country's largest oil and gas producer.

Foreign Investment

Foreign energy giants have so far played little role in the rapid development of the domestic oil and gas pipeline sector. Global oil companies such as BP and Shell do not own or operate any pipelines in China.

During preparation for the country's first East-West gas pipeline China signed a framework agreement with a Shell-led foreign consortium to jointly build the project. The agreement terminated, however, before the project went into commercial operation.

But multinationals are taking advantage of their advanced technology to provide equipment or solutions for domestic pipeline projects. GE, for instance, has signed agreements to provide its compression equipment for China's two West-East gas pipelines.

Last year GE also signed an agreement with China's top oil company Sinopec to supply centrifugal compressor packages and auxiliary equipment for the Sichuan to East China pipeline, which transports natural gas from the Puguang field in Sichuan to Shanghai.

Siemens last year also received a major order for the delivery of variable speed drive systems for the extension of the Shanjing II natural gas pipeline in China. The Shanjing II pipeline supplies natural gas from the western Shannxi province to China's capital Beijing.

The Siemens systems will be installed in three pipeline compressor stations and will start operating in fall 2009.

"We still anticipate continuous investments in pipeline projects in China," said Christian Lupp, general manager of oil & gas solutions, oil & gas division, energy sector, Siemens Ltd China.

(China Daily 03/02/2009 page8)