China launches natural gas transmission project

China launched a 140-bn-yuan ($ 17 bn) natural gas transmission project, which is designed to supply billions of cubic metres of natural gas each year to the country's east from the northwest through a pipeline of up to 4,200 km.
The pipeline starts from Lunnan oil and gas field in southern Xinjiang Uygur Autonomous Region, northwest China, and runs through the provinces of Gansu, Shaanxi, Shanxi, Henan, Anhui, Jiangsu and the Ningxia Hui Autonomous Region, and ends at Shanghai and Zhejiang province, east China.

Chinese Vice-Premier Wu Bangguo declared the construction of the project underway at a ceremony in the Great Hall of the People in Beijing. In a letter of congratulation, Chinese President Jiang Zemin said the West-to-East Gas Pipeline Project is a major move in China's strategy to promote the development of western China.
During his meeting with overseas contractors, Chinese Premier Zhu Rongji said China welcomes the involvement of overseas companies in the project. He called for improved cooperation between Chinese operators and their overseas partners in order to complete the project as scheduled.

Construction of parts of the pipeline began in Korla city of the Xinjiang Uygur Autonomous Region, Nanjing in Jiangsu Province, Zhengzhou in Henan Province and Jingbian County in Shaanxi Province. The contract, covering what is believed to be the largest Sino-foreign investment scheme for energy construction since the founding of new China, has been signed between the China National Petroleum Corporation and an overseas consortium composed of Shelland investors from Hong Kong and Russia.
At a ceremony held in the Gobi desert at the Tarim Oilfield, where the gas is to be extracted from, six automatic machines began welding the pipeline in an area decorated with coloured flags. When the project is completed in 2005, it is expected to transfer 12 bn cm of gas annually for industrial and domestic use to Shanghai and other parts of the Yangtze River Delta.

According to official statistics, western China has a gas reserve of 2.2 tcm, 59 % of the total onshore natural gas in China. Four key oilfields have been opened up in the region over the past few years. They have a combined yearly production capacity of 18 bn cm.
By 2010, western China will be able to produce 50 bn cm of gas annually, half of which will be shipped to energy-starved eastern China. A Chinese economist said construction of the West-East Gas Pipeline is of vital importance to China's economic growth as a whole.

Transmission of large amounts of gas to energy-deficient eastern China will help improve the energy structure of the Yangtze River Delta. Moreover, pollution caused by industrial waste in eastern China will be greatly reduced. Official statistics show that Shanghai suffers from acid rain on 11 % of the 365 days each year. When the gigantic gas project starts operation, the sulphur dioxide in Shanghai is expected to be reduced by 90 %.
As construction of the lengthy pipeline requires 1.74 mm tons of steel, large amounts of cement and other building materials, it will stimulate the cement, timber, machinery and iron and steel industries in areas along the pipeline. Operation of the pipeline will also make it possible for 85 mm urban households in eastern China to use gas for cooking. In Shanghai and Jiangsu Province alone, 17 mm urban households will have access to natural gas. The project is a chance for western China, which is rich in energy but lacks funds, to get rich.