The west-east gas pipeline will turn the energy advantages of
western regions into potential economic gains, said Mahmut
Muhammat, a deputy from
Xinjiang Uygur Autonomous Region to the Ninth National People's
Congress, China's top legislature. In an exclusive interview with
china.org.cn, Muhammat said he sees the gas pipeline project as a
significant component of the strategy of developing west China.
Mahmut Muhammat said the project also has great strategic
importance in maintaining political and social stability of
Xinjiang: With the major gas field located in Xinjiang Tarim Basin,
the pipeline project will promote the exploitation of natural gas
and accelerate the economic development of Xinjiang as well as
other western regions, bringing benefits to various ethnic groups
of Xinjiang.
The total investment in the tapping of gas fields upstream as well
as the investment in the laying of 1000-kilometer (621-mile)
pipelines will play a significant role in boosting the economic
development of Xinjiang, Muhammat said. After the completion of the
project, the government of Xinjiang will gain remarkable tax
revenues from the operation of both the pipelines and the
exploitation of the gas fields. Furthermore, some preferential
policies will be given to Xinjiang so as to reflect the state's
support and concern for the development of Xinjiang.
Mahmut Muhammat said he thinks that the west-east gas pipeline
project is in line with the state policy of expanding the domestic
market and that it will be conducive to the growth of the national
economy. The exploitation of gas fields upstream, the pipeline
construction in the middle section and the utilization of natural
gas downstream require a total investment of over 140 billion yuan
(US$17 billion) and 2 million tons of steel. It accordingly will
help such industries as metallurgy, machinery, electric power,
building materials as well as equipment manufacturing and other
related industries to upgrade their technology and products, and
create more job opportunities.
The west-east gas pipeline project also plays an important role in
preventing and controlling air pollution. At present, air pollution
in China is very serious due to its large consumption of coal as
fuel. Sulphur dioxide emissions in China rank first in the world,
and carbon dioxide emissions rank second in the world, second to
the United States. Natural gas is a clean energy. Using it as fuel
will reduce sulphur dioxide emissions and dust by almost 10 percent
and carbon dioxide emissions by nearly 60 percent.
A
series of large and middle-sized gas fields including the Kela-2
gas field have been found in the Kuche area, north of Xinjiang
Tarim Basin, which is the major gas supplying field of the
west-east gas pipeline project. By far, the proven natural gas
reserves in Tarim Basin are 526.7 billion cubic meters. In
addition, with the newly found gas fields including Dina-2 gas
field, Xinjiang is capable of supplying 12 billion cubic meters of
gas annually for 20 years.
According to Mahmut Muhammat, because of the huge investment
opportunities in the west-east gas pipeline project, beginning with
the year 2000 Xinjiang began to attract investment from overseas.
As of now, four foreign investors have signed cooperative memoranda
of understanding with Xinjiang on exploitation of gas fields,
construction of pipelines and marketing products.
According to a preliminary estimate, the whole west-east gas
pipeline project will require a total investment of 216 billion
yuan (US$26 billion). Whether such tremendous investment can be
recouped is of concern to people from all walks of life. Based on
the calculations by the State Development Planning
Commission, the average investment in the pipeline per kilometer
amounts to 10.58 million yuan (US$1.28 million). The cost is
roughly equal to the same kind of long-distance pipeline
construction in foreign countries in recent years, and it is within
a reasonable range. The after-tax financial profit rate made from
the pipeline project is 12 percent. The payback period on the
investment is about 10 years.
With China's
entry into the World Trade Organization (WTO), what impact will
imported liquefied natural gas have on the prices of natural gas
supplied by the west-east gas pipeline project? Mahmut Muhammat
answered this question with great confidence: China earlier made a
detailed and thorough investigation on this matter. The
investigation shows the natural gas supplied by the west-east gas
pipeline project will have a price advantage acceptable to
consumers over that of imported liquefied natural gas. In light of
prices of imported liquefied natural gas from Japan, the average
price of the natural gas piped from the west to various cities will
be 20 percent lower than the gas prices of Japan. Take the Yangtze
River Delta for example, the average prices accepted by local
people is higher than the average prices of natural gas supplied
from the west-east gas pipeline project. Therefore, natural gas
supplied from the west will have a thriving consumer market, now
and in the future.
Mahmut Muhammat concluded with the observation that when the
west-east gas pipeline project is completed in the year 2005, as
expected, Xinjiang residents will enjoy an increase in their income
while Shanghai residents will have access to affordable and clean
new fuel.
(By Zhang Xiaochong, china.org.cn staff reporter, translated by
Wang Qian, March 29, 2002)