China National Petroleum Corporation (CNPC) will invest 16 billion yuan (2.16 billion U.S. dollars) to fund construction of a planned Central Asia-China natural gas pipeline, CNPC's listed subsidiary PetroChina said on Friday.
CNPC Exploration and Development Company Ltd. (CNPC E&D) would be responsible for building the pipeline expected to pump the natural gas China purchased from Central Asia's Turkmenistan, said the announcement.
PetroChina and China National Oil and Gas Exploration and Development Corporation (CNODC) -- both CNPC subsidiaries and each with 50 percent of CNPC E&D -- would supply 8 billion yuan in cash, respectively.
PetroChina said in the announcement that CNPC E&D planned to cooperate with two state-owned development companies in Kazakhstan and Uzbekistan to build the pipeline.
In July, CNPC, the country's largest oil and gas company, agreed to import 30 billion cubic meters of natural gas annually through the planned pipeline for 30 years from Turkmenistan.
According to the construction plan, the pipeline would start from Gedaim on the border of Turkmenistan and Uzbekistan and extend 1,818 kilometers. About 525 km would run through Uzbekistan and 1,293 km in Kazakhstan to reach Khorgos in China's northwestern Xinjiang Uygur Autonomous Region. It would be connected with the country's planned second West--to-East natural gas pipeline.
Its designed gas transmission capacity was 30 billion cubic meters per year, a figure that could be lifted to 40 billion cubic meters. The project was estimated to cost 7.31 billion U.S. dollars.
To undertake the project, CNPC E&D established Trans-Asia Gas Pipeline Company Ltd., a wholly-owned subsidiary. Trans-Asia Gas would then set up joint ventures with the Kazakhstan and Uzbekistan development companies if approved by China.
The second West--to-East natural gas pipeline, to be constructed in 2008 and put into operation by 2010, would pass through 13 Chinese regions. It would carry natural gas from central Asian countries and Xinjiang to economically prosperous but energy thirsty eastern and southern China, including Shanghai and Guangdong Province.
Amid rising global oil prices and growing environmental concerns, China was set to look for cheaper and cleaner energy. The country planned to raise the ratio of natural gas in its energy consumption by 2.5 percentage points to 5.3 percent by 2010, a figure still far below the international average of 25 percent.
The country had endeavored to build a natural gas transmission network covering its whole territory. The first West-to-East pipeline, operated by CNPC, transmitted 12 billion cubic meters of natural gas from the Tarim Basin of Xinjiang to Shanghai annually.
In August, China Petroleum and Chemical Corporation (Sinopec), the country's second largest oil firm, started construction of its project to transmit gas from the Puguang field in southwestern Sichuan Province to Shanghai.
CNPC E&D, a PetroChina subsidiary, specialized in international oil and gas exploration and production. Its business covers countries including Algeria, Kazakhstan, Oman, Niger, Chad, Canada, Azerbaijan, Ecuador, Peru, Venezuela, China and Indonesia.
(Xinhua News Agency December 29, 2007)
