China National Petroleum begins construction on $19.7bn gas pipeline

China National Petroleum Corporation (CNPC) has begun construction of a third pipeline in a five-pipeline project to transmit natural gas from the nation’s resource-rich western regions to the energy-starved eastern region.

The new project, estimated to cost $19.7bn to build, will measure 7,378km and is expected to transmit 30 billion cubic metres of gas annually.

Starting from Horgos in Xinjiang, the pipeline will cross ten provinces and autonomous regions, including Xinjiang, Gansu and Ningxia, and will end at Fuzhou, capital city of Fujian. The pipeline will consist of one trunk line and eight branch lines.

The pipeline is to be completed before 2015 and is expected to increase the share of natural gas in China’s primary energy consumption.

It is anticipated to replace 76.8 million tonnes of coal and a result in a reduction of emissions of 130 million tonnes of carbon dioxide, 1.44 million tonnes of sulfur dioxide and 660,000 tonnes of dust.

In May 2012, CNPC, Baosteel and China’s Social Security Fund agreed to invest in the project through a joint venture company, in which CNPC holds 52% stake.

The first pipeline starts from Xinjiang and ends in Shanghai crossing ten provincial regions and has transferred more than 138 billion cubic metres of gas since 2004.

The 8,700km second pipeline runs from Xinjiang to Guangdong Province and is able to transfer 30 billion cubic metres of gas annually. It is expected to be operational by the end of the year.

The fourth and fifth pipelines are still in the planning phase.