PetroChina Co has started building China's third west-to-east gas pipeline, a 125 billion yuan (US$20 billion) project that will be able to transmit 30 billion cubic meters of the cleaner-burning fuel annually.
The project, expected to be completed in 2015, will consist of one main line and eight branch lines, spanning a combined 7,378 kilometers, China Central Television reported yesterday.
This is part of China's energy strategy to carry gas from the resource-rich western regions to power plants and homes in the coastal regions. In 2004, PetroChina completed China's first west-to-east pipeline, which ends in Shanghai. Construction of the second phase began in 2008, with a branch line to reach Hong Kong by the end of this year. A combined 290 billion yuan has been spent on the first two lines.
Natural gas consumption has been growing rapidly in China, rising 21.5 percent to 130.7 billion cubic meters last year.
The new project will be supplied by 25 billion cubic meters of gas from central Asian nations including Turkmenistan, Uzbekistan and Kazakhstan. The rest will come from gas produced from coal in Yili, the Xinjiang Uygur Autonomous Region, according to Liao Yongyuan, a vice president of PetroChina.
At full capacity, the project will increase the share of natural gas in China's primary energy consumption by 1 percentage point and supply 100 million people in 10 provinces along the route, including Gansu, Shaanxi, Hunan, Fujian and Guangdong.
The new project, which will boost gas imports from Central Asia, will also prompt the government to advance its pricing reform on natural gas, analysts said. Gas imports are losing money at present because of price regulation.
China earlier this year launched a trial program in southern Guangdong and Guangxi seeking to link gas prices to those of imported fuel oil used for power generation and liquefied petroleum gas used in cooking. Natural gas is increasingly replacing both fuels in the country.
The reform, which will bring prices more in line with commodities markets, is expected eventually to result in higher costs for consumers and benefit PetroChina and other state energy giants that are importing more gas to meet the growing demand.
Â
