Sinopec cleared to build giant coal-to-gas project
Beijing signs off on approvals for plan with a total price tag to come, although chairman says pipeline network will cost at least 100b yuan
China Petroleum & Chemical (Sinopec) has received Beijing's approval for a mega project to turn coal into natural gas as part of the mainland's strategy to increase energy efficiency and cut reliance on oil and gas imports.
Fu Chengyu, the chairman of the nation's second-largest oil and gas producer and the world's second-biggest crude oil refiner, said the project had received "all necessary government approvals", but the budget was not known.
"Since this project involves over a dozen provinces, the overall investment can be known only after a detailed feasibility study is completed," Fu said.
The project involves the construction of an 8,000-kilometre main gas pipeline from Xinjiang Uygur autonomous region to Zhejiang province through Guangdong. Five branch pipelines will also be built.
China is 90 per cent coal self-sufficient but imports almost 60 per cent of its oil and a quarter of its gas usage. Coal gasification subjects coal to high heat and pressure to turn it into gases, which are processed into natural gas and other by-products.
The total cost of the pipeline would exceed 100 billion yuan (HK$126 billion), Fu said, adding Sinopec would lead the project and be responsible for investing in 8 billion cubic metres of annual gas production and transmission capacity. Total capacity will be 30 billion to 36 billion cubic metres (bcm).