China's synthetic coal gas output to rise significantly by 2015: official
Singapore (Platts)--16Mar2012/619 am EDT/1019 GMT
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Coal-based synthetic gas production from western China is expected to grow significantly over the next few years, an official with the National Development and Reform Commission's think tank said Friday.
"We will see more coal-to-gas projects in Xinjiang and other western regions in the coming years. Output is now about a few billion cubic meters a year but there will likely be a significant increase by 2015," Zhou Fengqi, senior adviser at the NDRC's Energy Research Institute said. He said the government had not yet set an official production target.
The governments in the western provinces are encouraging alternative uses of coal to monetize their abundant resources.
But Zhou said investment in coal-gas projects would be spearheaded by the private sector and state-owned companies because the governments are cash-strapped.
"There is interest from commercial entities, including coal and power generation companies. The question is whether the central government will allow so many individual firms to get involved in coal-to-gas projects," Zhou said. Beijing has concerns about the energy-intensive nature of these projects. They also emit high amounts of carbon dioxide and water, he said.
Xinhua news agency reported March 6 that Sinopec would invest Yuan 53 billion ($8.38 billion) in Xinjiang in the current five-year plan to boost oil and gas output.
The company announced last year it would be investing heavily in two pipelines with total transmission capacity of 30 billion cubic meters a year (2.9 Bcf/day) to transport coal based synthetic gas to China's eastern coast. The first will be 7,373 km (4,581 miles) long and link Xinjiang with Guangdong and Zhejiang provinces. It will cost over Yuan 130 billion ($20.6 billion) and have five trunk lines. The second pipeline will also start in Xinjiang and will run to Shandong and Jiangsu provinces, spanning over 4,463 km (2,858 miles). The pipelines are expected to be operational by 2015.
Sinopec said on Friday that the longer pipeline would serve 13 provinces and municipalities including Gansu, Ningxia, Shaanxi, Shandong, Jiangxi, Zhejiang, Guangdong and Fujian while the second pipe will pass through seven major areas, including Hehan, Anhui, Tianjin, Jiangsu and Beijing.
Sinopec had signed a deal with the Xinjiang government and nine local companies -- including state power company Huaneng -- in December to procure synthetic gas for the pipelines.
--Song Yen Ling, yen_ling_song@platts.com |
