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CNPC seeks loans to fund Central Asia-China gas pipeline construction

(Xinhua)
Updated: 2008-07-24 18:04

The China National Petroleum Corp (CNPC), the country's largest oil and gas producer, said it was seeking a $2.5 billion loan from the China Development Bank for the Central Asia-China natural gas pipeline project.

The money would fund construction of the Uzbekistan section of the pipeline, expected to finish in 2009, a CNPC source told Caijing Magazine on Wednesday.

According to the construction plan, the pipeline would start from Gedaim on the border of Turkmenistan and Uzbekistan and extend 1,818 km. About 525 km would run through Uzbekistan and 1,293 km in Kazakhstan to reach Khorgos in China's northwestern Xinjiang Uygur Autonomous Region.

It would be connected with the country's planned second West-to-East natural gas pipeline.

CNPC agreed to import 30 billion cubic meters of natural gas annually through the planned pipeline for 30 years from Turkmenistan.

The company had to borrow money to help ease the funding pressures caused by some "policy reason," the source said without elaborating.

CNPC's profit before tax dropped 39 percent year-on-year to 56.4 billion yuan ($8.3 billion) in the first half because world crude prices continued rising and the government kept domestic refined oil prices far below international levels.

PetroChina, CNPC's listed arm, announced in June it would issue no more than 60 billion yuan in corporate bonds domestically over an unspecified to "satisfy the operational needs of the company, further improve its debt structure, reduce financing costs and supplement working capital."