Wednesday, January 30, 2002
China eyes FDI for Shanghai gas grid
REUTERS TUESDAY, JANUARY 29, 2002
BEIJING: China is seeking foreign partners to build a city natural gas grid in Shanghai and plans to double supply to the city to meet booming consumption, industry officials said on Tuesday.
The city grid would be fed in part by gas pumped through a 4,000 km (2,485 mile) pipeline from the northwestern region of Xinjiang, an official of the Shanghai Natural Gas Network said.
"We are in contact with several foreign companies on the cooperation," the official said. He declined to name them, but industry sources said they might include Royal/Dutch Shell and Hong Kong & China Gas.
A construction plan for the city grid had been submitted to the city government for approval, the official said.
Construction of the mega west-east gas pipeline, designed to carry 12 billion cubic metres of gas a year, is expected to start soon and to pump gas into Shanghai in the second half of 2003.
PetroChina and Shell have signed a preliminary deal to build the pipeline and jointly explore and develop gas fields in Xinjiang.
In addition to the gas from the west, Shanghai plans to double offshore gas production from the Pinghu field in the East China Sea to 2.2 million cubic metres a day, officials said.
All production from Pinghu, 250 miles off Shanghai in the Xihu Trough, goes to the city and provided 330 million cubic metres of gas in 2001, they said.
The expansion was expected to start this year and slated for operation in July 2003, before the gas from the west-east pipeline arrives later in 2003, they said.
"We will submit the ODP (Overall Development Plan) to the State Development Planning Commission for approval. We are trying to start construction this year," one Shanghai Petroleum official said.
Proven gas reserves at Pinghu, now at 11 billion cubic metres, was likely to double by the end of 2003, Shanghai Petroleum officials have said.
Shenergy holds a controlling 40 per cent stake in Shanghai Petroleum and Sinopec Star Petroleum and CNOOC each have 30 per cent.
Annual gas consumption in Shanghai, China's biggest industrial and commercial city, would be three billion cubic metres by 2005, industry sources said.
Shanghai would invest 5.7 billion yuan ($688 million) in natural gas pipeline projects and related infrastructure, they said.
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