West-east Pipeline www.chinapage.com
West-east Pipeline | [LatelineNews: 2004-12-29] BEIJING - Chinese oil major PetroChina said on Wednesday it had signed 12 more agreements to sell natural gas from its $8.5 billion west-east pipeline which it said would turn a profit from next year. The deals, announced in a statement, bring the total number of gas customers to 40 who will be buying a capacity 12 billion cubic metres of natural gas a year. The 4,000-km (2,485-mile) pipeline which runs from the Tarim basin in the northwest region of Xinjiang to booming eastern regions including Shanghai was expected to turn a profit in 2005 after entering partial operation this year, PetroChina said. "This year, it has nearly reached the break-even point and next year it will be profitable," vice president of PetroChina Co. Ltd., Su Shulin told reporters. The pipeline would begin full commercial operation on Thursday, Su said. Su dismissed fears aired by some analysts that the relatively high cost of natural gas might keep customers at bay. "Some local gas users have approached us asking for more gas so from this perspective the price is not high at all," he said. Booming China, the world's second-largest oil consumer, is trying to boost natural gas use to 8 percent of its mix by 2010, from about 3 percent now in the face of tight energy supplies. "Over the next 15 to 20 years, China's natural gas industry is going to develop very quickly," Xu Dingming, director of the energy bureau under the State Development and Reform Commission told reporters. "The completion of this project is just the first big step in that development," he said. Gas sales this year were expected to reach about 1.3 billion cubic metres and were seen rising to 4 billion cubic metres in 2005 and 10 billion cubic metres in 2006. In 2007, total gas sales were forecast to hit 12 billion, the designed capacity originally expected to be reached in 2008. PetroChina ended planned foreign partnerships in the pipeline in August. Analysts said foreign investors had balked at the high cost of the project and concerns that competing gas supplies could make it difficult to recoup their investment. Under the aborted framework deal, PetroChina would have had 50 percent of the project. Royal Dutch Shell, Russia's Gazprom and U.S. ExxonMobil had been slated to hold 15 percent each and Chinese refiner Sinopec five percent. Reuters |