China Adopts Gas-for-Oil Strategy

China's economic miracles over the past 20 years have put the country onto a fast-track towards its long desired modernization, yet the goals may be mired by an oil shortage as the country is expected to import as much as 50 percent of its total oil consumption in 2020.

Fortunately, large gas reserves cast light on solutions: a gas- for-oil strategy has been worked out to ensure a supply for China' s even bigger energy demands in the coming years' development of the robust economy.

A 500-billion-cubic-meter reserve gas field was prospected last June in the Inner Mongolia Autonomous Region. It is one of the largest gas fields in the world. "China has entered a golden age of exploiting its tremendous gas reserves," said Hu Wenrui, general manager of the Changqing Petroleum Company responsible for development of the field in the region.

Geologists have found four large gas fields with over 100 billion cubic meters of reserve in each in the Ordos Basin in Inner Mongolia, providing potential for meeting increasing gas demands in energy consumption restructuring.

China became an oil importing country in 1993 when it imported 9.93 million tons of petroleum. And the number shot up to as many as 64.56 million tons in the first 11 months last year, for which the country paid 13.5 billion US dollars in foreign currency.

"If we do not use saving methods or find a more economical substitute (for oil), China will have to rely on international markets for 50 percent of its oil supply in 2020," Wang Wanbin, deputy director of the State Trade and Economic Commission, said.

The nation aims to have the gas supply reach 8 percent of its total energy consumption within the first 20 years of this century.

The metropolises of Beijing, Tianjin, Shanghai, Guangzhou and Shenzhen have been exemplified as model cities to promote the use of gas, in the forms of CNG (condensed natural gas) and LPG ( liquefied petroleum gas), for motor vehicles instead of gasoline, with the aim of making the air over cities cleaner and fresher.

The Chinese capital Beijing vows to cut pollution by increasing the proportion of gas and electricity in energy consumption up to 75 percent in 2005, and to 83 percent in 2010.

Shanghai, China's largest industrial and commercial powerhouse, plans to increase the use of gas in the industrial and traffic sectors and build gas-fired power plants over the next five years, increasing the amount of gas used to 3 billion cubic meters in 2005.

China was one of the first countries to utilize natural gas, with a total potential reserve of 38 trillion cubic meters, but natural gas accounts for only 2.1 percent in the country's current energy consumption, or only one-tenth of the world average.

The nation had found gas reserves of 2.7 trillion cubic meters by the end of last year, mostly in the Western region.

Gas reserves in the Ordos Basin alone are expected to hit 2 trillion within a decade, with an annual output capacity of 40 billion to 50 billion cubic meters, which will lift the nation's gas supply up to 10 percent of all types of energy, according to Hu.

China is carrying out large-scale construction of pipeline networks around the country. The most prominent one is the " Western Gas to Eastern China" project, which was designed to transport 12 billion cubic meters of gas each year from fields in the Western region to the Yangtze River Delta region in east China, where a booming economy demands reliable and sufficient energy resources.

Thirty-three enterprises from the provinces of Henan, Anhui, Jiangsu, Zhejiang and the Shanghai Municipality have signed gas supply contracts with gas fields in the west.

The Changqing Company alone has an annual capacity of 4 billion cubic meters, providing a stable gas supply to Beijing, the Tianjin Municipality, Xi'an, capital of the western province of Shannxi and Yinchuan, capital of the Ningxia Hui Autonomous Region. And pipelines to Hohhot, capital of Inner Mongolia and Baotou, an iron and steel hub in Inner Mongolia, will start construction before the end of the year.






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