With its natural gas consumption expected to rise to around 420 Bcm by 2020, China continues to develop new import routes to provide the infrastructure that will be needed to meet an unprecedented rate of demand growth. Following the ceremony held to mark the start of construction of the Power of Siberia pipeline – which will bring gas from Russia via the eastern route – at the beginning of September, China has also broken ground in Tajikistan for Line D of the Central Asia-China gas pipeline.
The ground-breaking ceremony, held in the capital city of Duschanbe on 13 September, was attended by the Chinese president Xi Jinping and his Tajik counterpart Emomali Rahmon – underlining the importance of the project to both nations.
Line D will stretch 1,000 kilometres of which 840 km will be outside China and will have a capacity of 30 Bcm/year. The line will transport gas from the Galkynysh gas field in Turkmenistan and will run through Uzbekistan, Tajikistan and Kyrgyzstan.
Boosting capacity to 85 Bcm/year: Lines A, B and C of the Central Asia-China gas pipeline system are already in operation with a combined capacity of 55 Bcm/year. So line D when it comes on stream will boost that capacity to 85 Bcm/year. “Through this gas pipeline network, energy co-operation between China and the five Central Asian countries will be put to a new level,” said China National Petroleum Corporation (CNPC), one of the companies involved in developing the network.
According to CNPC, the 85 Bcm/year of gas imported from Central Asia via the Central Asia-China gas pipeline system will substitute for 113 million tonnes of standard coal, cutting carbon dioxide emissions by 121 million tonnes and sulphur dioxide emissions by 1.9 million tonnes.
China’s gas consumption has been growing rapidly, from just 25 Bcm in 2000 to 144 Bcm in 2012 – an average annual growth rate of 15.9%. To reach a level of 420 Bcm in 2020, consumption would have to continue to rise by an average of 14.3% for the rest of the decade. It is estimated to have reached around 170 Bcm last year, an 18% rise on 2012.
Another 250 Bcm/year in six years: The real challenge, however, stems from the absolute volume increase that would be required to meet the new target. The percentage increases since 2000 were from a very low starting figure. To achieve double-digit increases for the rest of the decade, starting from a figure of 170 Bcm/year in 2013, China would have to find another 250 Bcm/year of supply in just six years – and would have to construct a massive amount of infrastructure to produce, import and transport volumes of this scale. It would be an unprecedented level of gas market growth.
There are questions also over how quickly China could increase indigenous production and whether it could contract sufficient imports by pipeline and by LNG. That said, China’s “Big Three” state-owned oil and gas corporations – CNPC and its listed subsidiary PetroChina, China National Offshore Oil Corporation (CNOOC) and China Petroleum & Chemical Corporation (Sinopec Corp.) – have been making impressive progress in growing their LNG and pipeline import capacity and constructing transportation infrastructure for these imports.
China began importing gas from Central Asia in 2010 when Lines a and B of the Central Asia-China gas pipeline system began operating. The two lines connect with the second West-East gas pipeline in China at the border with Kazakhstan.
CNPC has also invested in the upstream in Turkmenistan to secure supplies of gas. In September last year CNPC and Turkmengaz signed a sales and purchase agreement for an additional 25 Bcm/year and an engineering, procurement and construction (EPC) contract for 30 Bcm/year of production capacity at the Galkynysh gas field. Turkmen gas exports to China are expected to reach 65 Bcm/year by 2020.
Line C of the Central Asia-China gas pipeline system began operations earlier this year when a gas valve was turned on at the end of May. The 1,830 km line runs parallel with Lines A and B, starting from Gedaim on the border between Turkmenistan and Uzbekistan and enters China at Horgos, Xinjiang, to link up with the third West-East gas pipeline.
China is also importing gas from Myanmar, through the 2,520 km Myanmar-China gas pipeline, 793 km of which runs from the bay of Bengal through Myanmar, and 1,727 km of which is in China. The line enters China at Ruili in Yunnan Province. It has a capacity of 12 Bcm/year and began operation towards the end of last year.
By Alex Forbes
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