A report in China’s Xinhuanet English news service says ceremonies were held on Tuesday in several locations across the nation, including Beijing, Fujian Province and the Xingjian Uygur Autonomous Region in the northwest, to mark the start of construction.
The pipeline, the third in an overall project to transfer gas from the west to the east of the country, will include one main artery, six branch lines, three gas storage facilities and a liquefied natural gas (LNG) terminal, and will run from the Xinjiang Uygur Autonomous Region to the Fujian provincial city of Fuzhou.
Initial phases of the project involved a 4,200-kilometre line connecting Xinjiang and the financial center of Shanghai which came online in 2004 with a 12 bcm capacity followed by a subsequent 8,704-kilometre second phase with an annual capacity of 30 bcm which started in 2008 and came online earlier this year.
Following completion of the third pipeline, which is expected by the end of next year, work on two further pipelines will follow somewhere around the middle of the decade. Each of these will have a transmission capacity of around 30 bcm and will service the country’s industrialised coastal regions.
The project is being operated by PetroChina Co Ltd, the publicly listed arm of China’s biggest energy conglomerate, China National Petroleum Corporation (CNPC). CNPC is also the major project shareholder (52 per cent), with other investors including Baosteel and China’s Social Security Fund.
China’s huge investment in pipeline construction is being driven by the nation’s enormous demand for natural gas, which in turn arises from the fuel’s relatively low cost compared with oil as well as a government push away from fossil fuels and toward low emission technologies.
In just six short years, the nation’s national gas consumption has risen almost threefold from 40 bcm in 2004 to 109 bcm in 2010.
To combat this, deputy director of the Pipeline Engineering Department at the PetroChina Planning and Engineering Institute Kou Zhong says the country’s total pipeline length will double to 140,000 kilometres by 2015, most of which will transport gas.