Gas stockpile to avert shortages

09:21, February 26, 2010      

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China National Petroleum Corp (CNPC), the country's largest oil and gas producer, plans to build 10 natural gas storage facilities between 2011 and 2015 to stockpile the fuel in the face of rising demand, said a company executive.

The 10 storage sites will be able to store 22.4 billion cu m of natural gas, the 21st Century Business Herald reported yesterday, quoting CNPC Vice-President Liao Yongyuan. The facilities will be located in regions which have rich gas sources and major consuming areas, including the Xinjiang Uygur autonomous region and northern China.

The storage facility construction project, part of the government's 12th Five-Year Plan (2011-2015), will account for 8 to 10 percent of the company's total natural gas sales volume, said Liao.

At present, the figure is only 3 percent, he added.

CNPC President Jiang Jiemin said that the company had decided to build 12 billion cu m of gas storage in its Changqing oil and gas field, which is located in Erdos in Inner Mongolia.

The facility will be China's largest gas-storage facility.

In order to meet rapidly rising demand for natural gas, China should speed up its construction of storage facilities to better prepare for potential shortages, said analysts.

The country should plan more gas storage in eastern regions, as they are high-consumption areas, they said.

Compared with Western countries, China started gas storage efforts late. Now global volume of gas storage facilities accounts for around 10 percent of total gas consumption. "There is a lot of room for us to improve," said Yang Lei, an official with the oil and gas department under the National Energy Administration (NEA).

Compared with the construction of crude oil storage, which has drawn much attention in recent years, construction of natural gas storage should be treated with equal importance, as the consumption of natural gas will see faster growth than other fossil fuels, said analysts.

The country's natural gas market is promising, as the use of the clean energy fits well with China's efforts to build an environmentally friendly economy, said Zhuang Rongjin, director of the natural gas department of the Guangdong Oil and Gas Association.

As a clean energy source, natural gas now accounts for only about 3 percent of China's total energy consumption. The government plans to increase the use of natural gas to 5 percent of total energy consumption in 2010.

According to a report by the International Energy Agency (IEA), China may be dependent on imports for more than one-third of its total natural gas consumption by 2030.

In 2004, China completed first west-east pipeline. The project exclusively uses domestically produced natural gas.

China is also building the second west-east gas pipeline. The 9,000-km-long line is the largest of its kind in the world. The pipeline will carry natural gas produced in Central Asia and Xinjiang to the country's eastern and southern regions.

Source: China Daily
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