Sinopec to forge 1,660-km LNG pipeline

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China's largest refiner Sinopec will start a 1,660-km liquefied natural gas (LNG) pipeline in May to channel the clean fuel from its Puguang gas field in Sichuan province to Shanghai, Jiangsu and Zhejiang provinces, a source familiar with the project said Wednesday.

The Sichuan-Shanghai gas pipeline, with a total investment of 62.7 billion yuan, will send 4 billion cubic meters of natural gas this year, Zhou Yuan, a deputy to the National People's Congress, said on Wednesday.

The Puguang natural gas field has proven gas reserves of 489 billion cu m, said Zhou, former vice-general manager of the Sinopec Group.

"Because of the start-up of the Puguang field this year, Sinopec will see brisk growth in its natural-gas production this year," he said.

Sinopec produced 8.3 billion cu m of natural gas last year, said Zhou, adding that the company has seen moderate growth in gas production over the past several years.

China plans to increase the use of natural gas to 5 percent of total energy consumption in 2010.

At present that figure is around 3 percent.

According to a report by the International Energy Agency (IEA), China's total domestic production of natural gas is expected to increase by, on average, 3.1 percent per year from 2006 to 2030, and the country could be dependent on imports for more than one-third of its total natural gas consumption in 2030.

Sinopec Group processed 184 million tons of crude oil last year. The company sold 129 million tons of refined oil domestically in 2009, said Zhou.

Because of moderate crude prices last year, Sinopec reported strong results in its oil refining business last year, said Zhou.

China last year adopted a new oil pricing mechanism, which has also brought benefit to the company's refining business, he added.

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