China’s position in oil and gas pipeline industry remains strong
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Meeting the growing needs in oil and gas has required two types of pipeline activities. One aims at connecting China’s oil and gas fields to its internal markets, demanding the expansion of its domestic pipeline networks. Another intends to facilitate imports to compensate for the gap between its domestic production and consumption. These objectives have justified major pipeline projects.
Falling back on its large internal market and expanding to the small African markets and large and/or growing markets in Latin America, Asia and the Middle East (particularly those of the Persian Gulf), China has withstood the ongoing recession while maintaining a healthy one-digit growth rate in 2008 (over 6%) and 2009 (over 7%) at a time when the American and European economies have contracted significantly.
Meeting such growing needs in oil and gas has required two types of pipeline activities. One aims at connecting China’s oil and gas fields to its internal markets, demanding the expansion of its domestic pipeline networks. Another intends to facilitate imports to compensate for the gap between its domestic production and consumption. These objectives have justified major pipeline projects which are discussed in this article.
Domestic oil and gas pipelines
China has embarked on major pipeline projects to supply its growing markets: being chiefly its enlarging cities, as a result of expanding urbanisation and industrialisation. In this regard, major ongoing projects include the 9000 km Second West-East Gas Pipeline (SWEGP). This mega project is undertaken by China National Oil and Gas Exploration and Development Corp. (CNODC), a joint venture of China National Petroleum Corporation and PetroChina. The pipeline will be fed by the under-construction Central Asian Gas Pipeline, also known as the Turkmenistan-China Gas pipeline.
The second major ongoing project is the Sichuan–Shanghai Gas Pipeline. With an estimated cost of US$ 9.18 billion, the 1700 km pipeline has the initial and final annual throughput of 12 billion m3 and 15 billion m3, respectively. Once fully operational, it will connect China’s huge Puguang gas field in Sichuan Province to the Chinese central and eastern regions.
Among the Chinese oil pipeline projects scheduled for laying, a significant one is the Rizhao-Dongming Oil Pipeline. Meant to feed an oil refinery in Dongming, the construction of the 462 km pipeline is planned to begin in Q2.
Interstate oil and gas pipelines
China is constructing or considering major oil and gas pipelines to ensure adequate supplies through imports as its own energy industry is unable to meet all its growing demand. Another major and equally important objective is Beijing’s intention to avoid dependency on any single energy supplier regardless of its reliability at a given time. Finally, having alternative routes and means of imports in the case of the closure of the Strait of Malacca (through which the bulk of its imported fossil energy, particularly crude oil, pass aboard sea tankers) forms another important objective. These objectives are the major components of its energy security policy.
Within this context, two key projects are the Myanmar-China Oil Pipeline and Myanmar-China Gas Pipeline. As China’s close regional ally, Myanmar, with deepsea ports, has become important for Beijing for enabling the Chinese to bypass the Strait of Malacca for its oil and gas imports; the strait could be closed to Chinese or Chinese-destined sea tankers under different scenarios. Additionally, the oil pipeline will shorten the distance between China’s suppliers in the Persian Gulf and Africa and the Chinese territory via a friendly country, providing also port facilities for oil tankers supplying the oil pipeline.
In November 2008, Beijing and Rangoon agreed to build two major pipelines, a US$ 1.4 billion gas pipeline (Kyaukpyu-Kunming-Guizhou-Guangxi pipeline) and a US$ 1.5 billion oil pipeline (Kyaukpyu-Kunming). These projects are a joint venture between China’s CNPC (50.9% stake) and the Myanmar Oil & Gas Enterprise (49.1% stake); CNPC is in charge of designing, constructing, operating and managing the two pipelines.
Skovorodino-Daqing oil pipeline
One ongoing inter-state pipeline is the Skovorodino-Daqing Oil Pipeline, a 1030 km pipeline to supply Russian crude oil to China. It is a branch of the under-construction Eastern Siberia–Pacific Ocean (ESPO) oil pipeline, also known as VSTO, through which Russia will export oil to the Pacific region. In February 2009, CNPC finally signed with Transneft a US$ 25 billion contract for the joint construction and operation of the pipeline.
Central Asia-China gas pipeline project
Another major ongoing project is the 7000 km Central Asia-China gas pipeline (CAC) known also as Turkmenistan-China gas pipeline. It is the first major independent gas link connecting the gas-rich Central Asia to a large market without using Russia’s giant gas company, Gazprom.
Dr. Hooman Peimani
Falling back on its large internal market and expanding to the small African markets and large and/or growing markets in Latin America, Asia and the Middle East (particularly those of the Persian Gulf), China has withstood the ongoing recession while maintaining a healthy one-digit growth rate in 2008 (over 6%) and 2009 (over 7%) at a time when the American and European economies have contracted significantly.
Meeting such growing needs in oil and gas has required two types of pipeline activities. One aims at connecting China’s oil and gas fields to its internal markets, demanding the expansion of its domestic pipeline networks. Another intends to facilitate imports to compensate for the gap between its domestic production and consumption. These objectives have justified major pipeline projects which are discussed in this article.
Domestic oil and gas pipelines
China has embarked on major pipeline projects to supply its growing markets: being chiefly its enlarging cities, as a result of expanding urbanisation and industrialisation. In this regard, major ongoing projects include the 9000 km Second West-East Gas Pipeline (SWEGP). This mega project is undertaken by China National Oil and Gas Exploration and Development Corp. (CNODC), a joint venture of China National Petroleum Corporation and PetroChina. The pipeline will be fed by the under-construction Central Asian Gas Pipeline, also known as the Turkmenistan-China Gas pipeline.
The second major ongoing project is the Sichuan–Shanghai Gas Pipeline. With an estimated cost of US$ 9.18 billion, the 1700 km pipeline has the initial and final annual throughput of 12 billion m3 and 15 billion m3, respectively. Once fully operational, it will connect China’s huge Puguang gas field in Sichuan Province to the Chinese central and eastern regions.
Among the Chinese oil pipeline projects scheduled for laying, a significant one is the Rizhao-Dongming Oil Pipeline. Meant to feed an oil refinery in Dongming, the construction of the 462 km pipeline is planned to begin in Q2.
Interstate oil and gas pipelines
China is constructing or considering major oil and gas pipelines to ensure adequate supplies through imports as its own energy industry is unable to meet all its growing demand. Another major and equally important objective is Beijing’s intention to avoid dependency on any single energy supplier regardless of its reliability at a given time. Finally, having alternative routes and means of imports in the case of the closure of the Strait of Malacca (through which the bulk of its imported fossil energy, particularly crude oil, pass aboard sea tankers) forms another important objective. These objectives are the major components of its energy security policy.
Within this context, two key projects are the Myanmar-China Oil Pipeline and Myanmar-China Gas Pipeline. As China’s close regional ally, Myanmar, with deepsea ports, has become important for Beijing for enabling the Chinese to bypass the Strait of Malacca for its oil and gas imports; the strait could be closed to Chinese or Chinese-destined sea tankers under different scenarios. Additionally, the oil pipeline will shorten the distance between China’s suppliers in the Persian Gulf and Africa and the Chinese territory via a friendly country, providing also port facilities for oil tankers supplying the oil pipeline.
In November 2008, Beijing and Rangoon agreed to build two major pipelines, a US$ 1.4 billion gas pipeline (Kyaukpyu-Kunming-Guizhou-Guangxi pipeline) and a US$ 1.5 billion oil pipeline (Kyaukpyu-Kunming). These projects are a joint venture between China’s CNPC (50.9% stake) and the Myanmar Oil & Gas Enterprise (49.1% stake); CNPC is in charge of designing, constructing, operating and managing the two pipelines.
Skovorodino-Daqing oil pipeline
One ongoing inter-state pipeline is the Skovorodino-Daqing Oil Pipeline, a 1030 km pipeline to supply Russian crude oil to China. It is a branch of the under-construction Eastern Siberia–Pacific Ocean (ESPO) oil pipeline, also known as VSTO, through which Russia will export oil to the Pacific region. In February 2009, CNPC finally signed with Transneft a US$ 25 billion contract for the joint construction and operation of the pipeline.
Central Asia-China gas pipeline project
Another major ongoing project is the 7000 km Central Asia-China gas pipeline (CAC) known also as Turkmenistan-China gas pipeline. It is the first major independent gas link connecting the gas-rich Central Asia to a large market without using Russia’s giant gas company, Gazprom.
Dr. Hooman Peimani
Read the article online at: https://www.worldpipelines.com/business-news/01122009/china%E2%80%99s_position_in_the_oil_and_gas_pipeline_industry_remains_strong_amid_the_recession-/
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