CNOOC ramps up gas development to fill planned pipeline

China has revealed a new element in its long-term natural gas supply plan. China National Offshore Oil Corp. intends to build a natural gas pipeline to move China�s offshore gas to markets in east China and will ramp up development work in order to justify the project.


BEIJING�China has revealed a new element in its long-term natural gas supply plan. China National Offshore Oil Corp. intends to build a natural gas pipeline to move China�s offshore gas to markets in eastern China and will ramp up development work in order to justify the project.

The pipeline should be built in the next 15 years and should stretch from Hainan Island through the coastal provinces of Guangdong, Fujian, and Zhejiang before it terminates in Shanghai. The concept is to transport gas produced from East China Sea and South China Sea to consumers in these provinces.

The company hopes to supply 30 billion cu m/year of natural gas, taking into account both production and LNG imports, by 2010. It is seeking to raise its recoverable gas reserves from the current 370 billion cu m to 1 trillion cu m in the next 10 years.

CNOOC�s largest gas operation is in the South China Sea, where it and ARCO�now part of BP Amoco PLC�are producing 3.4 billion cu m/year of natural gas for power generation and fertilizer production at Hong Kong and Hainan Island. In the East China Sea, CNOOC�s Pinghu field is producing 486 million cu m/year of gas.

The company is launching a massive E&D campaign, hoping to raising recoverable gas reserves to make the pipeline viable. Two new prospects in the South China Sea under development by CNOOC are believed to have a combined production capacity of 2.4 billion cu m/year.

CNOOC is expected to start in July a bidding process for a contract to build a 3 million tonne/year LNG receiving terminal in Guangdong province. Foreign investors are allowed to hold up to 30% of the $600 million project.

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