Gansu Province to launch two CTG projects
Beijing. July 14. INTERFAX-CHINA - Gansu Province plans to launch two coal-to-gas (CTG) projects with an aggregate annual production capacity of eight billion cubic meters (bcm), a government bureau announced July 12.
According to the Gansu provincial statistics bureau, the first of the two CTG projects, utilizing coal from the Xinjiang Uyghur Autonomous Region, will be based in either Zhangye City or Wuwei City. The second project is slated for coal-rich Qingyang City, located in the eastern Gansu basin. No project timeline was provided in the announcement.
The government statistics bureau declined to name the projects' operator(s) when contacted by Interfax July 13. Industry observers expect the CTG program will be run by one or more subsidiaries of China's tripartite state-owned energy monopoly.
The total allocation forecast for both projects is RMB 43.8 billion ($6.77 billion). Aggregate annual sales revenue is estimated to reach RMB 17 billion ($2.63 billion) once the projects are fully operational, a source from the bureau, who declined to be identified, told Interfax July 13.
The CTG projects will transmit gas through pipelines linked to China National Petroleum Corp.'s (CNPC) 2nd West-East Gas Pipeline (WEP II), the source added.
Once it reaches WEPII, the gas will travel to China's eastern and southern regions through the 8,653 kilometer pipeline.
Coal accounts for 70 percent of China's energy mix. Cleaning up the industry is high on the list of national priorities. China energy firms have been proceeding with CTG projects despite uncertain profitability, Interfax commented July 13.
Shenhua Group Corp. Ltd. (Shenhua Group), one of China's biggest coal-to-chemical companies, failed to make progress on a two billion cubic meter (bcm) per year CTG project this month owing to pipeline leasing disputes with CNPC, Interfax reported July 4.
Gansu is located in the northwestern part of China and has abundant coal resources, with some estimates of exploitable resources as high as 9.23 billion tons.
-LX/GW