China to open major west-east gas pipeline ahead of schedule
China will formally open a major west-east gas pipeline, four months ahead of schedule, with operator PetroChina
having tied up most of the supply contracts with customers, company officials said. The $ 8.5 bn, 4,200 km project
will channel natural gas from the Tarim basin on China's remote west to Shanghai and the booming eastern
regions.
China's top state oil and gas firm PetroChina will officially open the 2,330 km western sector, an official was
quoted as saying. It had earlier planned to start the western section in January 2005.
The 1,660 km eastern sector, which runs from Shaanxi province to Shanghai, is pumping about 4 mm cmpd of gas, since
it began operations last October, a company official said.
"We've so far signed 29 take-or-pay contracts with users with total committed volume of more than 8 bn cm by 2007," a
gas marketing official said. That would represent two thirds of the pipeline's total design capacity of 12 bn cm.
Most of the committed buyers are local gas distribution firms and industrial users, with power plants the last
remaining users yet to sew up deals, the marketing official said.
Under the framework deal signed in July 2002, the total cost of the pipeline was $ 8.5 bn, which included $ 5.25 bn
for the actual pipeline and $ 3.3 bn for upstream investments.
