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Friday, September 07, 2001, updated at 09:45(GMT+8)

Price Set for Gas From West

The preliminary price has been set for natural gas piped from the western regions, vice-general manager of China National Petroleum Corp announced.

Yan Shanzhong said the average price at divisional outlets in eastern target markets will be around 1.33 yuan (16 US cents) per cubic meter when the supply scale reaches 12 billion cubic meters per year.

"This price is the bottom line for ensuring effective operation of conveyance pipes and is acceptable to users -- it has considerable advantage over imported gas,'' Yan told the 2001 Western Forum of China which concluded in Xi'an Thursday.

The price for residents of the Beijing area is currently 1.70 yuan (21 US cents) per cubic meter, and the industrial-use price is even higher.

The pipeline from the gas-rich western regions to the east is a key project in the nation's 10th Five-Year Plan (2001-05), and is among the first group of programs in the western development strategy.

The 4,000-kilometre pipeline starts from the Tarim Basin in the Xinjiang Uygur Autonomous Region, proceeds across seven other provinces and ends in Shanghai and the Yangtze River Delta area.

It will involve a fixed asset investment of 40 billion yuan (US$4.8 billion) with a designed annual conveyance capacity of 12-20 billion cubic meters.

The feasibility report prepared by his company has been delivered to the State Development Planning Commission, according to Yan.

When approved, the eastern and western sections of the project will be started simultaneously by the end of this year.

Gas from the Shanganning area will be able to be delivered to Shanghai by 2003 in the first stage.

By 2004, the entire pipeline will be connected and brought into operation, with a targeted conveyance capacity of 20 billion cubic meters per year.

"We have conducted thorough consumption investigations in the gas markets of Shanghai, the Yantze River Delta and other regions, and have signed contracts with 38 users including a group of large gas consumers,'' Yan said.

"The estimated gas consumption volume will be over 10 billion cubic meters by 2005 and 20 billion cubic meters after 2010,'' he said.

Statistics show that the gas deposits of the Tarim Basin, the main supplier, amount to 8.39 trillion cubic meters, with a explored scale of 562 billion.

The Ordos Basin, the supporting gas source, has a deposit of 750 billion cubic metres.

A feasibility study is being conducted to introduce gas from Central Asia and Russia as substitute gas resources.

Source: China Daily

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The preliminary price has been set for natural gas piped from the western regions, vice-general manager of China National Petroleum Corp announced.

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