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Sinopec to Join Pipeline Project
Sinopec, China's second largest oil company, is expected to take up 5 percent of rival PetroChina's interests in the west-east gas pipeline.
According to Saturday's "China Daily", Sinopec and PetroChina, the nation's largest oil company that leads the project, have reached an agreement to allow Sinopec to invest 5 percent of PetroChina's equity in the 5.6-billion U.S. dollar pipeline.
PetroChina is expected to hold 51 percent shares of the pipeline, with the remaining 49 percent reserved for foreign partners, including Royal/Dutch Shell and Exxon Mobile.
The English newspapers said that the share allocation between PetroChina and foreign companies in the pipeline is still under negotiation, while Sinopec's slice has been settled.
Sinopec has discovered some 50 billion cubic meters of natural gas in Tarim Basin in northwest China's Xinjiang Uygur Autonomous Region, and its combined reserves in Tarim Basin and Ordos Basin are estimated to be able to supply 4 billion cubic meters of natural gas annually in the future.
"We have gas reserves in Xinjiang, and the best way to get them out is by investing in the pipeline," said Li Yizhong, president of Sinopec.
The project, seen as a flagship project to anchor China's drive to develop its resource-rich, but economically backward western regions, is expected to be kicked off by the end of this year, and to transport gas to Shanghai by 2003.
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