PetroChina, the country's biggest oil and gas producer, plans to spend about US$500 million to build underground natural gas storage facilities in the provinces of Jiangsu and Anhui.

 

"Eventual capacity of these gas storage facilities could reach as much as 2 billion cubic meters (bcm)," Zhai Guangming, an academician at the Chinese Academy of Engineering, said at an energy forum in Beijing on Friday.

 

Zhai is also a senior expert at PetroChina and participated in the discoveries of China's major oil and gas fields, such as Daqing and Shengli.

 

China last year produced 50 bcm of natural gas, more than 70 percent of which is contributed by PetroChina.

 

A senior official in charge of PetroChina's natural gas and pipeline business on Friday confirmed the storage project to China Daily.

 

He added it was an auxiliary project designed along with the US$50-billion West-East Gas Pipeline.

 

Beijing-based PetroChina at the end of 2004 announced the completion of a 4,000-kilometre-long pipeline to pump 12 bcm of natural gas from the Tarim Basin in the Xinjiang Uygur Autonomous Region to Shanghai.

 

"The (gas storage) project goes with the west-east gas line and will involve a total investment of 4 billion yuan (US$500 million)," said the senior official from PetroChina, who declined to be identified.

 

An initial project with a storage capacity of 140 million cubic meters is expected to be completed at Jintan of Jiangsu Province by July 1.

 

The size of further expansion will be based on PetroChina's supply increase, although a detailed timetable has yet to be worked out, the official said.

 

"For the moment, the 140-million unit is enough to handle our current supply," he said.

 

He added that it took the company three years to complete the construction of the Jintai storage facility.

 

These storage facilities in Jiangsu and Anhui are designed to deposit surplus gas when demand falls in the summer, and to ease shortages when consumption increases in the winter.

 

They can be used for domestically-produced or imported natural gas, the official said.

 

PetroChina is also looking at other places in Jiangsu, and neighboring Anhui Province, to build similar gas storage facilities, but the combined capacity would be less than the 2 bcm that Zhai proposed, the company official said.

 

"There isn't a definite figure, as we cannot predict the exact output by then," he said.

 

Zhai on Friday said China would be able to produce up to 150 bcm of natural gas by 2020, and imports could reach about 90 bcm by then to meet surging demand.

 

"The country will need to pump 40-60 bcm of gas from Russia and central Asian countries through cross-border pipelines by 2020.

 

"It will also need to secure 15 million to 30 million tons of imported LNG (liquefied natural gas)," the academic said.

 

Fifteen million to 30 million tons of LNG would be transformed into 20-40 bcm of un-liquefied natural gas.

 

PetroChina's parent company, China National Petroleum Corp, on Thursday announced the country's first cross-border crude oil pipeline has begun bringing oil into the northwest from Kazakhstan.

 

Analysts applauded the move, saying there could be more oil and gas pipelines with the nation's neighboring countries.

 

Oil majors, including PetroChina, Sinopec and China National Offshore Oil Corp, plan LNG terminals along the eastern coast to import natural gas.

 

(China Daily May 27, 2006)