Experts have mapped out China's natural gas pipeline network already in existence and to be constructed over the next 20 years. Natural gas, the most rapidly growing energy resource of the century in terms of consumption, was a key topic of discussion at the China Oil & Gas Pipelines Development Summit that was held in Beijing from June 15 to 16.

The main highlights of the network plan were published in a Beijing Morning Post report on June 19.

Domestic arteries

Since the late 1990s, several natural gas arteries have been constructed including the Shaanxi-Beijing Pipeline, West-East Gas Pipeline that starts in Lunnan Oilfield in the Tarim Basin in northwest China's Xinjiang Uygur Autonomous Region, spans eight provinces and autonomous regions and ends in Shanghai, the Zhongwu Line that pipes gas out of Sichuan Province, and a second Shaanxi-Beijing Pipeline.

"Adding the Coastal Natural Gas Pipeline and several cross-border pipelines through Russia and Kazakhstan, which are under construction now, a basic frame of gas transportation pipelines in China is forming rapidly," said Professor Liu Yijun from China University of Petroleum.

Currently, China's natural gas pipelines measure a total of 24,000 kilometers. According to estimates provided by Liang Chengyu, head of Guangdong Oil & Gas Association, this should increase to 36,000 kilometers by the end of 2010.

Pan Jiahua, honorary chairman of the executive council of the Petroleum Reserve and Transportation Committee of the China Petroleum Society, this period of time -- from now until 2020 -- will see rapid development of China's natural gas pipelines industry. Pan sets 2021 to 2030 as the maturation period.

Despite this rapid development, China will continue to be faced with the challenges of inadequate natural gas supplies. It is estimated that by 2020, China's natural gas shortage could be as much as 90 billion cubic meters.

"China will solve the shortage mainly through imports of liquefied natural gas (LNG) and land pipeline natural gas," said Tang Yali, vice general manager of China National Petroleum Corporation (CNPC)'s Natural Gas and Pipeline Branch Company.

In order to satisfy growing domestic demands, China has already started several LNG import projects, Australia being one of the main exporters.

At present, 11 coastal provinces, municipalities and autonomous regions have plans to build large-scale LNG import projects, with Guangdong planning on two. An estimated 12 LNG projects are being drafted and will be submitted for state approval.

Cooperation with Russia and Central Asia

In March, China and Russia signed a Memorandum of Understanding for the transport of natural gas from Russia to China. From 2011, Russia, the world's No.1 natural gas exporter, will supply 60 to 80 billion cubic meters annually to China.

Exports will be transported in two ways: the west pipeline will enter China's Xinjiang through Siberia and Altai, and finally connect with the West-East Gas Pipeline, supplying natural gas to China's coastal areas. The east pipeline, yet to be confirmed, might transport natural gas from Kovykta or Sakhalin and Chayandinskoye gas fields located in Yakut.

Russia and two of China's major oil companies, CNPC and China Petroleum and Chemical Corporation (Sinopec), will construct the 3,000-km long west pipeline first. It is expected to transport gas within five years, which can supply 30 to 40 billion cubic meters of natural gas to China annually. 

As significant is the planned natural gas pipeline between China and three Central Asian countries.

"After 2009, the 30 billion cubic meters of natural gas that Turkmenistan will supply annually will also be an important source of China's natural gas reserves," Pan said.

Pan was referring to the contract signed between China and Turkmenistan during Turkmen President Saparmurat Niyazov's visit to China in April. Under the 30-year contract, Turkmenistan will export 30 billion cubic meters of natural gas annually to China starting from 2009, two years earlier than China's agreement with Russia. The contract also provides that the China-Turkmenistan natural gas pipeline should be completed by then.

However, because China and Turkmenistan do not share any borders, certain monetary and logistical arrangements have to be made to transport the natural gas through Uzbekistan and several Kazakhstani territories before finally connecting with the West-East Gas Pipeline.

Uzbekistan and Kazakhstan also have abundant sources of natural gas, and both have expressed their willingness to export to China. Once the China-Turkmenistan pipeline is constructed, all three Central Asian countries will be able to supply natural gas to China simultaneously.

(China.org.cn by Wang Qian, June 22, 2006)