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| November 18, 2000 | atimes.com | ||
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China
China roadshow to woo pipeline investors By Tony Allison Chinese authorities are to launch a series of international symposiums on pipeline technology in an effort to attract participation from overseas companies in its giant project to pump natural gas 4,200 kilometers from the west to the east of the country. Xinhua news agency reported Thursday that focus would be on inner coating for pipelines, anticorrosion, working facilities and work in dangerous terrains. It gave no details of dates or targeted countries for the shows. Preliminary studies and route selection have already begun on the West-East Gas Transmission Program which involves the construction of a pipeline running from the Lunnan Oil Field in the Tarim Basin in northwest China's Xinjiang Uygur Autonomous Region, and ending in Shanghai and the industrialized eastern seaboard. It will run through Gansu, Shaanxi, Shanxi, Henan, Anhui and Jiangsu provinces and the Ningxia Hui Autonomous Region. This includes passage across the Gobi desert, the Loess Plateau and the Yangtze, Huaihe and Yellow rivers. Foreigners welcome In July of this year the State Development Planning Commission (SDPC), which heads the project and which is involved in coordinating all aspects of it, announced that foreign participation - and even a majority stake - would be allowed. This would include upstream gas exploration, construction of the pipeline and the management and building of downstream distribution networks, including urban areas, and retail sales. One of China's three main oil companies, China National Petroleum Corp (CNPC), which this year listed in Hong Kong and New York, will be responsible for negotiations over the Talimu gas field with foreign partners, and any proposed deals will have to be approved by the central government. Foreigners have a number of investment channels open to them, including setting up joint ventures, cooperative firms or buying stocks in PetroChina. The announcement over foreign involvement was a major breakthrough as previously foreign investors were not allowed majority control in any projects in the construction and operation of gas pipelines. Similarly, they had been barred from any involvement in the construction of urban gas distribution networks. Other benefits afforded to foreign companies involved in the pipeline will include royalty exemptions and tax exemptions on imported equipment. The project The project will be launched in early 2001 and is due to be completed in stages. Investment to date is 45.6 billion renminbi (US$5.51 billion). Total investment, including all construction, exploration and excavation of the gas fields, city network construction and industrial utilization, is expected to reach renminbi 120 billion. The Jinbian-Shanghai pipeline is due to be completed by the end of 2002 and the Lunnan-Jingbian pipeline to be finished by 2003. Natural gas will flow through Shaanxi, Gansu and Ningxia to the Shanghai market in the early stage of construction. Natural gas from the Tarim Basin will reach the Yangtze River Delta region by 2004, while supporting pumping stations will be built along the route. The pipeline is designed to carry 12 billion cubic meters of natural gas to Shanghai annually by 2005, and the gas field is expected to provide a steady supply for 30 years. The maximum total of natural gas carried by the pipeline will eventually reach 20 billion cubic meters annually. The Talimu Basin has natural gas reserves of about 1 trillion cubic meters in an 80,000 square kilometer area. Natural gas is expected to play an important role in China's energy development strategy for the 21st century, with gas utilization accounting for 8 percent of China's energy consumption instead of the present 2 percent. The pipeline is a key project in China's efforts to develop its relatively impoverished western regions, and to tackle the increasingly acute energy shortage in the Yangtze River Delta, which is a direct result of rapid economic development. Once completed, the pipeline will form a new growth point for local economic development and increase the development of iron, steel, cement, machine-building, electronics and the building industries in central and western China. (Special to Asia Times Online) |
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