The planned pipeline to deliver natural gas from Sichuan to eastern China will start construction next month, an exclusive source from Sinopec said to China Daily yesterday.

"The National Development and Reform Commission (NDRC) has given the nod to kick off construction of the Sichuan-eastern China pipeline as early as next month," the Sinopec insider said. "As operator of the project, we are busy extracting natural gas from our Sichuan operations as requested by the NDRC."

He said Sinopec's Puguang Gasfield in Sichuan Province will mainly feed the pipeline.

As Asia's top refiner and the second-largest oil and gas producer after China National Petroleum Corporation (CNPC), Sinopec is planning to complete the 1,702-km-long pipeline with a designed annual transport capacity of 12 billion cubic meters by 2010.

The project is estimated to cost 65.7 billion yuan, according to recent reports by the Xinhua News Agency.

Another source from Sinopec verified reports made to China Daily yesterday.

"Originally the pipeline was designed to supply natural gas for Shandong Province. However, as more reserves were proven in Sichuan's Puguang Gasfield, construction of the pipeline was re-designed and it is now expected to supply gas to both Shandong Province and other regions, mainly the Yangtze River Delta area," the second Sinopec source said.

With several sub-pipelines, the Sichuan-eastern China pipeline is designed to eventually supply gas to Sichuan, Hubei, Jiangxi, Anhui, Jiangsu and Zhejiang provinces and Chongqing and Shanghai municipalities, according to Xinhua reports.

The change in pipeline construction plans proves the reserve potential of Puguang Gasfield in Sichuan, said Liu Gu, a senior energy analyst with Guotai Jun'an Securities.

"We have learned that it is almost an assured thing for the currently available reserves of Puguang Gasfield to further grow in the future as more exploration efforts are made," Liu added.

Sinopec's Puguang Gasfield has proven exploitable reserves of 356 billion cubic meters, the country's second-largest, according to information from the Ministry of Land and Resources earlier this year. China's largest gasfield, the Sulige Gasfield in the Inner Mongolia Autonomous Region, has proven reserves of 533.6 billion cubic meters.

(China Daily July 26 2007)