23 Apr 2010 08:36

CNPC to spend $3.6 billion on new gas depot at Changqing Oilfield

Taiyuan. April 22. INTERFAX-CHINA - China National Petroleum Corp. (CNPC), China's largest oil and gas producer, will spend RMB 24.4 billion ($3.6 billion) to construct a large gas depot in the Changqing Oilfield, a company executive told Interfax at an industry forum in Taiyuan on April 22.

CNPC announced this February that the depot will be able to store 12 billion cubic meters of natural gas in Changqing Oilfield, located in the Ordos Basin.

Liu Qingchang, a CBM exploration and exploitation official under CNPC's PetroChina Huabei Oilfield Co. Ltd., said that the project will start operations in 2013.

According to Liu, the depot will produce 100 million cubic meters of natural gas per day upon completion.

Xi'an Evening News reported on April 21 that of the 12 billion cubic meters of stored gas, 4 billion will be kept for national strategic reserves, 5 billion will be supplied to Beijing Municipality and 3 billion to Xi'an City in Shaanxi Province.

In 2009, China consumed 87.45 billion cubic meters of natural gas, up 11.5 percent year-on-year. Zhang Guobao, of the National Energy Administration (NEA), said that last winter there was a shortage of over 1 billion cubic meters of gas.

Though the gas shortage accounted for a very small proportion of the country's total output and import, China still saw many cities temporarily cut gas supplies. Industry insiders have argued that the lack of a gas depot was a crucial factor in the shortage.

Li thinks that a large depot in Changqing Oilfield, which already boasts the largest gas output in China, will greatly ease shortages during peak periods of consumption. However, he also noted that since the country's gas consumption is growing rapidly, more depots need to be built.