Soaring energy demand in China has driven PetroChina's crude output up 2 percent, and gas up 23.4 percent in the first six months year-on-year.

The country's largest oil and gas producer yielded the equivalent of 481 million barrels of oil and gas during the first half of the year, an increase of 5.3 percent from a year earlier, PetroChina said on Friday in a statement on its web site.

Its crude oil production reached 396 million barrels from January to June, an increase of 8.1 million barrels on the same period last year.

On the gas front, the company said, solid domestic demand as well as enhanced pipeline facilities have pushed PetroChina's gas turnover up 23.4 percent, or 96 billion cubic feet, to top 506.3 billion cubic feet for the first six months.

"We have put focused efforts on tapping natural gas resources, which are one of PetroChina's major profit contributors. A host of gas pipeline projects have been put online during the first half of the year But supply is still far from meeting the fast-expanding gas market in China highlighted by major regional economies such as Beijing and Shanghai," Bi Jianguo, director of PetroChina's public relations told China Daily on Friday.

Industry sources said the world's second largest energy consumer after the United Sates is projected to need 63.7 billion cubic meters of natural gas for the whole of this year.

Major parts of the gas pipeline network in Central China's Hunan Province such as the Zhongwu Pipeline were completed in the first six months to supply gas from gas-rich Sichuan Province to Hunan.

The second Shaanxi-Beijing Gas Pipeline -- able to transport 12 billion cubic meters of natural gas annually from the province to the capital -- began operation at the start of this month, PetroChina said.

Other facilities to expand the country's West-East Gas Pipeline are also well under way to increase gas supply from Xinjiang to Shanghai and Beijing, the statement said.

In oil refining, PetroChina processed 378.9 million barrels of crude into refined oil such as diesel and gasoline during the first half, up 7.4 percent from 2004.

Petrochemical production by the company also witnessed "stable" growth, it said. Ethylene output increased 2 percent to 941,000 tons from January to June.

Gong Jingshuang, a senior analyst with China National Petroleum Corp (CNPC), the Beijing-based parent company of PetroChina, said the skyrocketing crude price on the international market has sweetened the upstream oil and gas businesses of China's oil majors but squeezed their refining business.

(China Daily July 16, 2005)