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PetroChina to expand its oil network
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China's largest oil and gas producer, Hong Kong-listed PetroChina, plans
to invest up to 100 billion yuan (US$12.3 billion) to expand its oil and gas
pipelines by 15,000 kilometres over the next five years.
The new
pipelines will be concentrated in the southwestern, northwestern and
northeastern areas of China, with a cross-border pipeline construction also on
State-owned PetroChina's budget, said a company statement released by the
State-owned Assets Supervision and Administration Commission of the State
Council yesterday.
The oil giant, by expanding its pipeline network,
aims to secure oil and gas supplies to the end users. The company also seeks to
enhance its refining business and fortify its footing on the domestic market in
refined oil retailing which is to see escalating competition within the industry
in the coming years, said experts.
Of the 15,000 kilometres of pipelines
to be completed by 2010, 8,000 kilometres will be used for natural gas
transportation, 3,000 for crude oil and 4,000 for refined oil.
The new
oil pipelines will link PetroChina's major oilfields to the refineries, and then
pump the refined oils such as gasoline and diesel to oil storage facilities and
service stations across the nation.
The pipelines under-construction for
refined oil and crude oil transportation in the western region are scheduled to
go operational by the end of this year and next August respectively. These lines
total 4,000 kilometres, the company statement said.
The company did not
specify the details of the two lines.
Other lines linking large-scale
PetroChina refineries in the northeast and northwest such as the Lanzhou
refinery of Gansu Province, and Jinxi refinery of Liaoning Province to the fuel
guzzling northern and central areas of China are also being prepared.
Part of the pipeline designed to pump crude oil from Kazakhstan to
PetroChina's Dushanzi refinery in the Xinjiang Uygur Autonomous Region of
Northwest China, is expected to go online by the end of the year.
The
cross-border pipeline will ensure more crude supplies to PetroChina refineries
from PetroKazakhstan, recently acquired by PetroChina's parent company China
National Petroleum Corp (CNPC) for US$4.18 billion, a CNPC insider declining to
be identified told China Daily.
PetroChina's ambitious plan was
announced shortly after the company unveiled its long-term plan to speed up its
refining business.
The State-owned oil company said at the end of last month
that it aimed to expand the annual crude processing capacity of its four oil
refining and petrochemical production bases in Fushun and Dalian
in the
northeast, and Lanzhou and Dushanzi in the northwest, to at least 10 million
tons each.
"PetroChina will speed up the development of the refining and
petrochemical businesses within the next five to 10 years to meet soaring demand
in the domestic market as the economy booms," said Wu Guanjing, director-general
of the Hong Kong-listed oil company's refining and chemical research and
development centre.
"The expanded pipeline network is a must for moving
the increased refined oil production," Gong Jinshuang, a senior CNPC analyst
told China Daily.
The current oil shortage, the nadir of which was last
month's gasoline rationing in South China's Guangdong Province, was largely due
to a lack of transportation.
Chen Ge, spokesman of the nation's
largest oil refiner Sinopec, blamed the oil shortage in Guangdong on the
typhoons that halted oil shipping, currently Sinopec's main method for moving
oil from the northern refineries to the south.
"It is more urgent for
PetroChina to build the pipelines, as most of PetroChina's refineries are in the
north, while Sinopec has a more extended refinery layout reaching to east and
south," said Zhang Jian, an industry analyst with China Securities.
PetroChina may also seek to
safeguard its refined oil-retailing network across the nation, by expanding the
refined oil pipelines, because an increasing number of both domestic and foreign
oil companies are eyeing the retail market, said Zhang.
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(Editor:Caroline Wang) (From:China Daily)
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