Energy

CNPC plans to extend pipeline network

By Zhou Yan (China Daily)
Updated: 2011-02-22 10:20

Workers inspect a CNPC facility in Henan province. [Photo / China Daily]

Oil major aims to double the length laid during the past five years

BEIJING - China National Petroleum Corp (CNPC), the country's largest oil and gas producer, said it is planning to double the length of pipelines laid during the period of the 12th Five-Year Plan (2011-2015) from the amount constructed during the past five years, in a bid to improve the company's energy access.

The industry giant constructed 270,000 kilometers (km) of pipeline during the 11th Five-Year Plan (2006-2010), exceeding the total laid in the previous 42 years, the company said on its website on Monday.

The overall length will reach 540,000 km by the end of 2015.

The figure is much higher than the company's estimation made last May, when Ma Yingliang, the manager of the China Petroleum Pipeline Bureau, which specializes in pipeline engineering projects under CNPC, said that the company had planned to build approximately 40,000 km oil and gas pipelines within 10 years, according to reports on NetEase.com.

The predicted length indicates that CNPC has accelerated the pace of pipeline construction on the back of the country's surging demand for natural resources.

CNPC, the country's major pipeline operator, had laid 500,000 km of oil and gas pipes in total, accounting for 70 percent of China's total crude oil pipes in terms of distance by the end of 2010, while the natural gas pipeline accounted for 90 percent, according to figures compiled by the CNPC Research Institute of Economics & Technology.

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"As the dominant player in the market, CNPC has benefited from the pipeline construction boom which has arisen from the country's attempts to boost the supply of natural gas," said Rui Dingkun, an energy analyst at China Jianyin Investment Securities.

In 2010, CNPC completed some major gas projects that include the 1,393 km-long eastern section of Line 2, which connects Zhongwei in the Ningxia Hui autonomous region and Huangpi in Hubei province, as part of the country's flagship West-to-East natural gas pipeline project.

The project's Line 3 will start construction after the completion of Line 1.

The research arm of CNPC projected that construction of China's natural gas network will maintain strong growth momentum during the coming years in accordance with the country's continuous large-scale imports of the fuel and the increasing volume of reserves in the domestic oil and gas fields.

China's apparent consumption of the fuel was estimated to have reached 110 billion cubic meters in 2010, according to the National Energy Administration. Apparent consumption includes domestic production and imports, but excludes exports.

"If no more cross-border pipelines are mapped out, then pipes linking domestic destinations will become the major growth engine," Rui said.

The 1,833-km-long Central Asia - China gas pipeline, the country's first natural gas pipe from overseas which runs through Turkmenistan, Uzbekistan and Kazakhstan before reaching China, started transporting fuel in December 2009.

China is now also in negotiations with Russia over gas transportation.