PetroChina Co, the country's biggest energy producer, will build underground natural-gas storage tanks in western Xinjiang province to guard against supply disruptions.

Construction of the 4 billion cubic-meter Hutubi storage base will begin "soon", parent China National Petroleum Corp (CNPC) said in its online newsletter Wednesday. PetroChina will start filling the tanks in June next year, CNPC said. Hutubi will be the first storage complex on the nation's second West-East natural gas transmission project that's linked to Central Asia, CNPC said.

China is building oil and gas stockpiles as demand surges in the world's fastest-growing major economy. The nation aims to double the use of gas to about 8 percent of energy consumption by 2015 to help cut reliance on more polluting oil and coal.

The Hutubi base will be completed in four years in two phases, CNPC said.

CNPC plans to build 10 gas storage tanks by 2015, Caijing magazine said on February 25, 2010. The tanks will be able to hold 22.4 billion cubic meters of gas, as much as 10 percent of the company's total sales, Caijing cited Vice President Liao Yongyuan as saying.

The Hong Kong-listed energy producer rose HK$0.18 or 1.50 percent to close at HK$12.22 on Wednesday, compared with 0.56 percent gain of the city's benchmark Hang Seng Index.

PetroChina posted a 35 percent gain in profit last year, beating estimates, as crude prices rose and fuel demand increased in the world's fastest-growing major economy.

Net income climbed to 140 billion yuan ($21.3 billion), or 0.76 yuan a share, from 103.4 billion yuan, or 0.56 yuan a shares, in 2009, the company said in a statement to the Hong Kong Stock Exchange on March 17.

PetroChina aims to spend an estimated 77.3 billion yuan ($11.8 billion) on natural gas and pipeline development this year, compared with 53.6 billion yuan in 2010, according to its annual report.

The second West-East pipeline connecting Xinjiang with Hong Kong can transport as much as 30 billion cubic meters of gas a year from Turkmenistan. PetroChina started building the 9,102 kilometer (5,657 mile) link in February 2008. The pipeline may be completed by this year.

CNPC may double gas imports from Central Asia to between 55 billion and 60 billion cubic meters a year with an additional pipeline, the company said in January last year.

China's gas demand may rise to 230 billion cubic meters in 2015 from 130 billion cubic meters this year, CNPC said on January 20. Domestic production may climb 11 percent to 105 billion cubic meters this year, while imports may exceed 30 billion cubic meters, the Beijing-based company said.

China Daily - Bloomberg

(HK Edition 04/07/2011 page3)