China fires up section of west-east gas pipeline

Petrochina has held a ceremony in Jingbian to celebrate the trial operation of the east section of the west-east gas pipeline that snakes from Shaanxi's Jingbian County to Shanghai. Jingbian is a major gas production base for the company's gas-rich Changqing oilfield.
China fires up section of west-east gas pipeline China fires up section of west-east gas pipeline China fires up section of west-east gas pipeline China fires up section of west-east gas pipeline China fires up section of west-east gas pipeline

Gas from the Changqing field is to supply gas to the pipeline until the Tarim basin becomes the main source from 2005, as by then the western section of the pipeline from Xinjiang's Lunnan to Jingbian will be hooked up.

PetroChina believes that the Changqing field has natural gas reserves of around 1.1 trillion cubic meters, of which 751 billion cubic meters are recoverable reserves. It also feels that its Jingbian production base, with an annual production capacity of 4.8 billion cubic metres, can more than easily supply Beijing, Tianjin, Xi'an, Hohhot, Yinchuan and the eastern section of the pipeline, which experts believe may only require around 2.1 billion cubic metres of gas.

PetroChina has already inked draft take-or-pay contracts with 19 out of the 35 companies that signed letters of intent for gas from the pipeline.

The expected price for the gas will be around 1.27 yuan per cubic metre, 0.02 yuan cheaper than the earlier set estimate, and gas prices will be linked with the price swings of crude oil, liquefied petroleum gas and coal.

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