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China Natural Gas, LPG, and LNG Market Newsletter

To look past issues of the free monthly China Natural Gas, LPG, and LNG Market Newsletters, please click following tittles:
Apr 20, 2004 - Issue 31, China Natural Gas, LPG, and LNG Newsletter 
Mar 20, 2004 - Issue 30, China Natural Gas, LPG, and LNG Newsletter 
Feb 20 2004 - Issue 29, China Natural Gas, LPG, and LNG Newsletter
Dec 20, 2001 - Issue 3, China Natural Gas, LPG, and LNG Newsletter
Nov 20, 2001 - Issue 2, China Natural Gas, LPG, and LNG Newsletter
Oct 20, 2001- Issue 1, China Natural Gas, LPG, and LNG Newsletter
China Natural Gas, LPG, and LNG Market Newsletter
April 20, 2004 - Issue 31
===================================================
This issue includes...
1. China plans to build more LNG terminals in 2010
2. Hong Kong Town Gas joint venture with Xuzhou city
3. Shenzhen city gas group released the shares
4. Ulumuqi city controls LPG whole sale price
5. Haikou city decrease natural gas price
6. Zhejiang province issued a city gate natural gas price
7. Wuhan city is preparing to replace existing gas by natural gas
8. Gas fields for cross China transmission project ready to supply gas
9. Petro China signed "Pay or Take" contract with Nanjing
--------------------------------------------------------------------------------------
1. China plans to build more LNG terminals in 2010
--------------------------------------------------------------------------------------
CNOOC signed MOU with Tianjin city government last month to
build a LNG terminal. Another tree more terminals are being
considered by Shanghai city, Jiangsu province, and Shandong
province. Jiangsu province is discussing the project with Petro
China and Shandong province intends to cooperate with Sinopec.
--------------------------------------------------------------------------------------
2. Hong Kong Town Gas joint venture with Xuzhou city
--------------------------------------------------------------------------------------
On April 8, a joint venture city gas distribution company was formally
formed by Hong Kong Town Gas and Xuzhou City Gas Company.
Hong Kong Town Gas will invest 0.245 billion RMB to take 80% shares
of the joint venture and Xuzhou City Gas Company will take the rest of
20%. The company has the right to operate 50 years. Xuzhou city is
a big industrial city in Jiangsu province and will get natural supply next
year and reach annual 70 million cubic meters of natural gas usage
in 2005.
--------------------------------------------------------------------------------------
3. Shenzhen city gas group released the shares
--------------------------------------------------------------------------------------
Shenzhen city gas group has been controlled by Shenzhen city
investment Management Company. This company released 30%
and 10% of shares from Shenzhen city gas group to Hong Kong
Town Gas and New Hope Group respectively. The total shares
of the company is based on the value of 0.905 billion RMB. Hong
Kong Town Gas and New Hope Group pay 30% and 10% of the
value respectively to own the correspondent shares. Other
companies such as Baijiang, BP, France Gas, Yuehai,and
CNOOC also bided for the shares but fail to win the bid.
-------------------------------------------------------------------------------------
4. Ulumuqi city controls LPG whole sale price
--------------------------------------------------------------------------------------
In Ulumuqi, the capital city of Xinjiang autonomous region, LPG
retail price has been set as 40 Yuan RMB per 15 kg bottle since
last year. As the competition among the whole sale companies,
LPG whole sale price has decreased to 31.5 Yuan RMB per 15
kg bottle but the retail price is still at 40 Yuan. Ulumuqi city gas
administration office has regulated the LPG whole sale price to
minimum 38 Yuan RMB per 15 kg bottle since April 12.
--------------------------------------------------------------------------------------
5. Haikou city decrease natural gas price
--------------------------------------------------------------------------------------
As Dongfang 1-1 gas field well head natural gas price decreased,
residential gas price in Haikou city, the capital city of Hainan island
province, will decrease from 2.6 Yuan per cubic meter to 2.1 Yuan
per cubic meter. Industrial and commercial users will pay fewer
prices along with quantity increase. The prices are ranged from
2.5 Yuan per cubic meter to 1.8 Yuan per cubic meter, decreasing
from original commercial price of 3 Yuan per cubic meter and
original industrial price of 2.6 Yuan per cubic meter
--------------------------------------------------------------------------------------
6. Zhejiang province issued a city gate natural gas price
--------------------------------------------------------------------------------------
On April 1, Price Bureau of Zhejiang province, a rich coastal province
in China, issued the city gate price for natural gas from west to east
cross China natural gas transmission pipeline as 1.58 Yuan RMB per
cubic meter at GB 17820 standard with pressure 101.325 Mpa and
temperature 20 ?C
--------------------------------------------------------------------------------------
7. Wuhan city is preparing to replace existing gas by natural gas
--------------------------------------------------------------------------------------
Wuhan city natural gas Company starts to investigate household by
household in Wuhan, the capital city of Hubei province, to prepare for
replacing existing gas utensil, gas meter, and gas valves by the ones
suitable for natural gas. The existing gas in Wuhan city includes LPG
and coal gas. Wuhan will start to use natural gas transmitted from
Chongqing city in Sichuan basin at the end of this year.
--------------------------------------------------------------------------------------
8. Gas fields for cross China transmission project ready to supply gas
--------------------------------------------------------------------------------------
Tarim basin in Xinjiang autonomous region, one of the natural gas
sources of west to east cross China transmission pipeline project,
will start to produce natural gas and to transmit the natural gas to
Shanghai on October 1 this year. There are four natural gas fields
in the basin. Total investment for the gas field is 4.66 billion Yuan
RMB. By the end of this year, the annual natural gas production
capacity will be 14 billion cubic meters
--------------------------------------------------------------------------------------
9. Petro China signed "Pay or Take" contract with Nanjing
--------------------------------------------------------------------------------------
By hard negotiation, Nanjing city, the capital city of Jiangsu province,
singed the "Pay or Take" contract with Petro China (or CNPC). Petro
China will supply natural gas to Nanjing city on April 25. The contract
is signed for 20 years to supply 0.34 billion cubic meters natural gas
each year to Nanjing city.

===============================================
 
China Natural Gas, LPG, and LNG Market Newsletter
March 20, 2004 - Issue 30
===================================================
This issue includes...
1. China will purchase LNG from Iran
2. Petro China signed "Pay or take" contract with Tianjin city
3. China will build 3rd LNG terminal in Zhejiang province
4. Jiangsu province regulated a natural gas residential price
5. Xian city will build more CNG refuelling stations
6. Guanghui group completed its first phase LNG project
7. Chengdu city has discovered a new natural gas field near the city
8. Beijing will build 3 natural gas power plants
9. Zhuhai city will build city LPG distribution pipelines step by step
10. Guanzhou city will build more LPG refueling stations
11. Jinan city starts to build CNG refueling stations
12. Chongqing city will close most natural gas field near the city
13. Xian city will reorganize the city gas companies
14. Huhehaote will supply more natural gas
15. A travel company in Guilin city involves in city gas business
--------------------------------------------------------------------------------------
1. China will purchase LNG from Iran
--------------------------------------------------------------------------------------
A Chinese state oil trader said it had inked a preliminary deal to
import more than 110 million tons of liquefied natural gas (LNG) over
25 years from Iran for $20 billion as China grows thirsty for energy.
The deal would mark one of the world's largest LNG purchase deals
if a final agreement is signed. "This is only a memorandum of
understanding," said a spokeswoman for Zhuhai Zhenrong by telephone
from Beijing. "We have yet to negotiate for an upstream stake (in Iran)
and secure gas off-takers in China." She said Zhenrong signed the
memorandum with the National Iranian Gas Exporting Company in
Beijing on March 3 and would issue a more detailed announcement
in the second half of this year. Zhenrong said in a statement it signed
the framework agreement to buy 2.5 million tons of the super-cooled,
compressed natural gas per year from Iran starting in 2008, rising to
5 million tons a year from 2013.
--------------------------------------------------------------------------------------
2. Petro China signed "Pay or take" contract with Tianjin city
--------------------------------------------------------------------------------------
On March 12, Petro China and Tianjin City Gas Group signed "Pay or
Take" agreement for the 2nd Shannxi to Beijing transmission pipelines
to supply annual 1.2 billion cubic meters of natural gas to Tianjin city.
Last November, Petro China also signed "Pay or Take" agreement
with Shanxi province to supply annual 2.1 billion cubic meters of natural
gas. The 2nd Shannxi to Beijing transmission pipeline is mainly for
Beijings natural gas demand which will increase from 2 billion cubic
meters of natural gas demand in 2002 to 5.8 billion cubic meters of
natural gas demand in 2008. The provinces and cities along the
pipeline will also be benefit from this pipeline.
--------------------------------------------------------------------------------------
3. China will build 3rd LNG terminal in Zhejiang province
--------------------------------------------------------------------------------------
On March 10, Zhejiang provincial government and CNOOC signed
an agreement to build LNG terminal in Ningbo city of Zhejiang province.
This will be the 3rd LNG terminal in China with total investment of 14
billion RMB. The first phase of the project will build 3 million tons of
LNG capacity. A natural gas power plant will be built with 350,000 kw
capacity and 14.2 billion RMB investment. The project will be controlled
by CNOOC with 51% shares and by Zhejiang Energy Group with 49%
shares. Natural gas power plant will be controlled by Zhejiang Energy
Group and Ningbo Power Development Company with 71% shares
and by CNOOC with 29% shares. The first phase of project is
planned to completed in 2009.
-------------------------------------------------------------------------------------
4. Jiangsu province regulated a natural gas residential price
--------------------------------------------------------------------------------------
Jiangsu Provincial Price Bureau has issued the natural gas price for
residential users as 2.21 RMB/cubic meter. The city gate price for
Jiangsu province is 1.42 RMB/cubic meter for residential users, 1.27
RMB/cubic meter for industrial users, and 1.10 RMB/cubic meter for
power generation. The city gate gas price for residential users plus
distribution cost and tax will be 2.298 RMB/cubic meter (The gas
distribution cost in Nanjing city is 0.721 RMB/cubic meter. The tax is
0.157 RMB/cubic meter of natural gas). This newly issued price of
2.21 RMB/cubic meter is lower than the cost of Distribution Company.
The price will gradually increase to 2.35 RMB/cubic meter.
--------------------------------------------------------------------------------------
5. Xian city will build more CNG refuelling stations
--------------------------------------------------------------------------------------
Xian city, a capital city of Shannxi province, currently has 11 CNG
stations which can not meet the gas refueling demand for taxies and
buses. There are more than 9,000 vehicles has installed natural gas
engine to use natural gas. As no enough CNG stations, the vehicles
often take line to wait for natural gas refueling. The Xian city
government has located the sites for 75 CNG refueling stations.
30 stations will be built in 2005; another 45 stations will be completed
in 2007.
--------------------------------------------------------------------------------------
6. Guanghui group completed its first phase LNG project
--------------------------------------------------------------------------------------
Xinjiang Guanghui Group, a large LNG private player in Xinjiang
autonomous region, has completed it first phase of LNG project.
LNG process plant in Shanshan will process daily 1.5 million cubic
meters of LNG. The project will be invested 8 billion RMB and be
divided into 4 phases to complete in 2008 with daily LNG transportation
capacity of 12 million cubic meters and LNG production capacity of
annual 4 billion cubic meters. On February 20, the designated railway
of 1.8 km for LNG transportation only was completed to transport
LNG produced by Guanghui group. The group already bought 200
trucks to ship the LNG and plan to ship the LNG to coastal cities of
China by both trucks and railways.
--------------------------------------------------------------------------------------
7. Chengdu city has discovered a new natural gas field near the city
--------------------------------------------------------------------------------------
A natural gas field, Luodai, near Chengdu city, a capital city of Sichuan
province, has been discovered with demonstrated reserves of 30 billion
cubic meters of natural gas and has potential of total 50 billion cubic
meters of natural gas. The gas field covers 530 square meters and is
located at Longquanyi area and is 10 km from Chengdu city. This new
natural gas field can satisfy the need of Chengdu city for 50 years.
--------------------------------------------------------------------------------------
8. Beijing will build 3 natural gas power plants
--------------------------------------------------------------------------------------
Beijing will build 3 natural gas power generation plants located in
Yungang and Caoqiao of Fengtai district and Taiyanggong of Chaoyang
district to supply electricity in 2006. Total capacity of three power plants
will be 1.8 million Kw. Caoqing power plant is co-generation of electricity
and heating and will supply heating for10 million square footages of
residential buildings. Taiyanggong power plant will supply electricity,
heating, and cooling.
--------------------------------------------------------------------------------------
9. Zhuhai city will build city LPG distribution pipelines step by step
--------------------------------------------------------------------------------------
A new city gas plan for Zhuhai city which bordered with Macao is
completed by North China Civil Engineering Design Institute. The
plan is for short term (year 2003 to 2006), medium term (year 2007
to 2010), and long term (year 2011 to 2020). In short term, pipeline
LPG will supply 40,000 households of residential users through the
existing 64,000 meters of distribution pipelines; 4 LPG refuelling
stations and 25,300 medium pressure pipelines will be built. In
long term, the residential users will be 274,400 households.
---------------------------------------------------------------------------------------
10. Guanzhou city will build more LPG refueling stations
----------------------------------------------------------------------------------------
18 LPG refuelling stations will be completed this March and will be
operated in April in Guangzhou city, a capital city of Guangdong
province. 12 more LPG stations will be built at the end of the year.
Total 30 LPG refueling stations will be available in Guangzhou city
to supply 12,000 taxies and 2000 public buses.
---------------------------------------------------------------------------------------
11. Jinan city starts to build CNG refueling stations
----------------------------------------------------------------------------------------
Jinan city, a capital city of Shandong province, will build 4 CNG
refueling stations in 2004 to fuel 1200 public CNG buses. The city
government will require the all new buses to meet the Europe II
standard.
---------------------------------------------------------------------------------------
12. Chongqing city will close most natural gas field near the city
----------------------------------------------------------------------------------------
Chonging Kaiyuan Oil and Gas Company closed the natural gas
well named as Dong 17 well?because the well is closed to the
Chongqing city area. Affected by a gas well blowing and pollution
in Chongqing, 7 more natural gas closed to the city will be closed
gradually. As more natural gas wells are developed and transmit
through the transmission pipelines, so to close the wells near the
city will not affect the natural gas supply.
---------------------------------------------------------------------------------------
13. Xian city will reorganize the city gas companies
----------------------------------------------------------------------------------------
Xian city, a capital city of Shannxi province, will reorganize the city
gas companies in Xian. Coal gas pipeline part of Xian Coal Gas
Company will be separated and merge with Xian Natural Gas
Company. Xian Natural Gas Company will operate all gas pipeline
business in Xian and Xian Coal Gas Company only operate the
LPG business in Xian.
---------------------------------------------------------------------------------------
14. Huhehaote will supply more natural gas
----------------------------------------------------------------------------------------
Huhehaote city, a capital city of Inner Mongolia, will consume 30
million cubic meters of natural gas and 30 million of coal gas in 2004.
320 new hot water boilers for heating supply will be installed. The city
currently has 1.1 million square meters of building square footage
supplied by gas heating. 1.8 million square meters of new building
square footage will be built in 2004 for heating supply target.
---------------------------------------------------------------------------------------
15. A travel company in Guilin city involves in city gas business
---------------------------------------------------------------------------------------
Guilin Travel, a company listed in Chinas stock market, will joint
venture with Xinao Gas Company to invest pipeline gas in Guilin
city which is a famous tourist city Guangxi autonomous region.
Guilin Travel and Xinao Gas will invest 2.4 million and 3.6 million
US dollars respectively and take 40% share and 60% share of
the joint venture company.

===============================================
 
China Natural Gas, LPG, and LNG Market Newsletter
February 20, 2004 - Issue 29
===================================================
This issue includes...
1. Guangzhou city prepares high pressure gas distribution pipeline system

2. Shengli oil field finds a new gas discovery

3. A big LPG whole seller in Yunnan province will expand to LPG retail

4. Shanghai will build LNG cargo for Guangdong LNG project

5. Chongqing city plans for biggest underground natural gas storage in China

6. Hong Kong Town Gas invests in Jinan City of Shandong province

7. LPG player in Nanjing city of Jiangsu province decreases LPG price

8. Chengdu city will invite the qualified companies to operate city gas

9. The JV city gas in Nanjing signs "Pay or Take" contract with CNPC
-----------------------------------------------------------------------
1. Guangzhou city prepares high pressure gas distribution pipeline system.
-----------------------------------------------------------------------
As an end user of Guangdong LNG project, Guangzhou city, a capital city of
Guangdong province, authorizes the Huabei Civil Engineering Design Institute
to design the high pressure gas distribution pipelines in Guangzhou city. The
project includes 108 km high pressure pipelines (1.6MPa to 5.0MPa), 3
receiving gate stations (Eastern Gate at Xintang of Zengcheng, South Gate
at Jinshan Road of Panyu, and Nansha Gate at Nansha of Huangge), and 5
medium to high pressure control stations.
----------------------------------------------------------------------
2. Shengli oil field finds a new gas discovery
----------------------------------------------------------------------
Shengli oil field in Shandong province measured a 56,202 cubic meters
daily natural gas flow from a deep well rig on February 7. This well may
reveal a new natural gas discovery with estimated natural gas reserve of 20
billion cubic meters. The exploration is continuing.
---------------------------------------------------------------------
3. A big LPG whole seller in Yunnan province will expand to LPG retail
--------------------------------------------------------------------
LPG Sales Company of Dian-Qian-Gui Oil Exploration Bureau, a LPG whole
sale company, formally expanded LPG sales to LPG retail market in Yuxi city
of Yunnan province on February 8. This company controls one third of LPG
whole sale market in Yunnan province. This action is mainly because of chaos
of LPG market in Yunnan province. There are about 90 LPG whole sellers in
Yunnan province. The competition is severe and the profit margin for whole
sellers is low. The LPG retailers often cheat the consumers. This big whole
sale company hopes to push the LPG market in Yunnan in order by its
participation in both whole and retail market.
------------------------------------------------------------------
4. Shanghai will build LNG cargo for Guangdong LNG project
-------------------------------------------------------------------
Shanghai Hudong Ship Building Company will build the LNG cargo for
Guangdong LNG project. The contract may be singed at the end of February.
The company plans to build 2 cargos with each capacity of 147,000 cubic
meters of LNG. The company also will win the contract to build LNG cargo
for Fujian province LNG project.
-------------------------------------------------------------------
5. Chongqing city plans for biggest underground natural gas storage in China
-------------------------------------------------------------------
Chongqing Gas Group will invest 0.2 billion RMB to build an underground
natural gas storage with gas storage capacity of 0.2 billion cubic meters.
This storage alone could satisfy the need of Chongqing city for two months.
Chongqing Gas Group supplies annual 0.7 billion cubic meters of natural gas
but only have one day gas backup storage to adjust the natural gas supply
shortage. This biggest underground natural gas storage is urgent need for
the city. The feasibility study will starts in this March.
------------------------------------------------------------------
6. Hong Kong Town Gas invests in Jinan City of Shandong province
------------------------------------------------------------------
A joint venture company formed by Hong Kong Town Gas and Jinan Pipeline
Coal Gas Company formally established on January 18. Hong Kong Town
Gas will invest 0.25 billion RMB in eastern Jinan city, obtaining 60% of shares
of the joint venture company. Jinan Pipeline Coal Gas Company provide
exiting pipelines, city gates, and other facilities to own 40% shares of the
joint venture company.
-----------------------------------------------------------------
7. LPG player in Nanjing city of Jiangsu province decreases LPG price
-----------------------------------------------------------------
Baijiang Company, a Hong Kong stock market listed company, announces to
decrease 10% of current LPG price starting from February 20 in Nanjing City,
a capital city of Jiangsu province. Baijiang Company has 60% of LPG market
shares in Nanjing city. The price for 14.5kg bottle LPG decreases from 60
RMB to 55 RMB.
----------------------------------------------------------------
8. Chengdu city will invite the qualified companies to operate city gas
----------------------------------------------------------------
Chengdu city, a capital city of Sichuan province, will release the state owned
shares of Chengdu City Gas Company to foreign and domestic companies.
Hong Kong Town Gas and Baijang Company have shown the interests to
acquire the shares and hope to take at least 50% shares of the Chengdu
City Gas Company. But Chengdu city is only willing to release less than
50% shares.
----------------------------------------------------------------
9. The JV city gas in Nanjing signs "Pay or Take" contract with CNPC
---------------------------------------------------------------
Nanjing Hong Kong and China Company, a joint venture company between
Hong Kong Town Gas and Nanjing City Gas Company, signs "Pay or Take"
contract with CNPC. CNPC will supply 0.1 cubic meters of natural gas from
west to east cross China transmission pipeline to Nanjing city and will supply
annual 0.3 billion cubic meters of natural gas to Nanjing city starting from 2007.


 
China Natural Gas Market Newsletter
December 20, 2001 - Issue 3
==============================================================

This issue includes´

  1. Beijing city will promote air condition powered by natural gas
  2. First CNG refueling station was installed in Zhengzhou, Henan province
  3. Kuming city of Yunan province promotes LPG vehicles
  4. Nanjing City Natural Gas Company was established
  5. CNOOC will invest natural gas pipelines in Zhejiang province
-------------------------------------------------------------------------------------------------------------------
    1.    Beijing city will promote air condition powered by natural gas
-------------------------------------------------------------------------------------------------------------------
Beijing city consumes 50% of its annual natural gas supply in heating supply area, or
80% of natural gas supply in heating supply during winter season.  The natural gas
consumption in heating sector during winter is 5 times more than that during summer
season. Controversially, the electricity capacity is over loaded in summer as air
condition will consume 37% of electricity supply during the summer season.  To
release electrify load and consume extra natural gas capacity in summer, Beijing city
will promote to install air condition powered by natural gas by charging a lower natural
gas price.  Currently, Beijing has installed natural gas air conditions in about 500 hotels
and office buildings.  The air condition equipment powered by natural gas with heating,
cooling, and hot water supply functions will have a potential huge market in Beijing.
-------------------------------------------------------------------------------------------------------------------
    2.   First CNG refueling station was installed in Zhengzhou, Henan province
------------------------------------------------------------------------------------------------------------------
This October, first CNG refueling station was installed in Zhengzhou, the capital city of
Henan province.  6 CNG stations and 20 CNG stations will be installed in 2002 and
2005 respectively.
-------------------------------------------------------------------------------------------------------------------
    3.   Kuming city of Yunan province promotes LPG vehicles
------------------------------------------------------------------------------------------------------------------
Since 1999, Kuming city has converted 200 LPG vehicles. a new LPG refueling station
was installed in Haigen this October.  This new station can fill 900 vehicles daily.
Kuming city intends to convert most of vehicles into LPG fuel and build about 20 LPG
refueling stations.
-------------------------------------------------------------------------------------------------------------------
    4.    Nanjing City Natural Gas Company was established
-------------------------------------------------------------------------------------------------------------------
Nanjing city of Jiangsu province established a city natural gas company for preparing
to use the natural gas from cross-China transmission pipeline project in 2003.  The
new company is joint venture by Nanjing city coal gas company, Nanjing city investment
company, and Zhongbei company.  This new company will responsible for transforming
current coal gas pipelines into natural gas pipelines and natural gas utilization projects,
such as CNG stations and NGV.
-------------------------------------------------------------------------------------------------------------------
    5.    CNOOC will invest natural gas pipelines in Zhejiang province
------------------------------------------------------------------------------------------------------------------
CNOOC, Zhejiang Energy Group, Nandu Holding Company, and Zhejiang Power
Company will form a joint venture Zhejiang Natural Gas Development Company. CNOOC
will have 27% share of this new company.  This new company will build natural pipelines,
invest natural gas power plants, natural gas sales, and other natural gas utilization
projects.
===============================================================
China Natural Gas Market Newsletter
November 20, 2001 - Issue 2
==============================================================

This issue includes´

  1. China will import natural gas to accommodate the short supply
  2. The competitive natural gas price in China
  3. Natural gas market in eastern China for west-east pipeline project
  4. Natural gas underground storage will be built in Jintan city, Jiangsu province
-------------------------------------------------------------------------------------------------------------------
    1.    China will import natural gas to accommodate the short supply
-------------------------------------------------------------------------------------------------------------------
Predicted by China State Planning and Development Commission, natural gas short
supply in China will be more than billions cubic meters in 2010.  Since issuing
"The proposal for dividing the regions for acid rain and sulfur dioxide control" in 1998,
China has significantly increased natural gas utilization.  To accommodate the demand
increase, China has not only been promoting domestic exploration and development
but also considering to import natural gas.  Except LNG, China will mainly consider to
import natural gas from Russia.  The transmission pipeline with 4000 to 5000 km
length will be built between China and Russia and will extend to Korea.  The target
market of Russian gas in China will be the northeastern China and Bohai bay area,
approximately with demand of 20 billion cubic meters in 2010. The feasibility study for
building the transmission pipeline from Russia to China and to Korea may be finished
in 2002. 
 
-------------------------------------------------------------------------------------------------------------------
    2.    The competitive natural gas price in China
-------------------------------------------------------------------------------------------------------------------
To compete with electricity, natural gas price usually should be 50% of electricity price.
As an example in Beijing, the heat value of one cubic meter natural gas is 35.58 MJ
which is correspondent to electricity of 9.88 kwh or 10 degree. The 50% of the price
3.88 RMB of 10 degree electricity in Beijing is 1.942 RMB. So the residential natural
gas price of about 2 RMB / M3 may be acceptable for the residential users if competing
with electricity. For more detailed natural gas price analysis in China, please access to
 
-------------------------------------------------------------------------------------------------------------------
    3.   Natural gas market in eastern China for west-east pipeline project
-------------------------------------------------------------------------------------------------------------------
To market natural gas of west-east pipeline project, CNPC has signed the letter of
intent with 33 companies in Shanghai, Jiangsu, Zhejiang, Henan, and Anhui provinces.
The preliminary natural gas demand for these companies would be 9 billion cubic meters
in 2005 and 13 billion cubic meters in 2007.  For more detailed information of natural
gas utilization and market analysis in the above provinces, please access to
 
------------------------------------------------------------------------------------------------------------------
    4.    Natural gas underground storage will be built in Jintan city, Jiangsu province
------------------------------------------------------------------------------------------------------------------
To adjust seasonal natural gas demand variation, an underground natural gas storage
will be built in Jintan city of Jiangsu province for west-east pipeline project.  There is
rock salt mine in Jintan city with area 60 square km and rock salt reserve 12.5 billion
ton.  The mine has a good sealing condition and is easy to mine by water dissolving.
The natural gas storage capacity of this mine will be 1 to 1.5 billion cubic meters and
will meet the demand for daily natural gas adjustment 0.8 billion cubic meters in
Yangzi river delta area.
 
===============================================================

China Natural Gas, LPG, and LNG Market Newsletter
October 20, 2001 - Issue 1
==============================================================

This issue includes

  1. China tries to create a natural gas law
  2. A new natural gas transmission pipeline in Tianjin city starts to build
  3. Several planned natural gas power plant projects
  4. Qinghai province natural gas burner opportunity
  5. Chongqing city will further promote CNG vehicles
  6. Beijing city natural gas utilization planning
------------------------------------------------------------------------------------------------------------------
    1.    China tries to create a natural gas law
-------------------------------------------------------------------------------------------------------------------
The principles of the law are to gradually decrease the monopoly and bring more
competitions in natural gas industry. The law will cover production, transmission, and distribution. As the existing mineral resource law already covers natural gas exploration and production, so the new natural gas law will focus on the natural gas after purification from the purification plant. The law will mainly adopt the British model.
-----------------------------------------------------------------------------------------------------------------
    2.    A new natural gas transmission pipeline in Tianjin city starts to build
------------------------------------------------------------------------------------------------------------------
The transmission pipeline is located in Bianhai district of Tianjin city with total length of 113 kilometers and high pressure. Total investment is 0.25 billion RMB. The first phase and second phase of the project will be completed in the end of 2001 and 2002 respectively. The pipeline starts from Xianshuigu and goes along Tangu district,  Tianjin Economic and Technology Development Zone, Hangu district, and end at Ninghe county.
------------------------------------------------------------------------------------------------------------------
    3.    Several planned natural gas power plant projects
------------------------------------------------------------------------------------------------------------------
Several natural gas power plants will be built in China near future, including:
    - Xinjiang Hetian natural gas power plant, the first phase with 50,000 kW capacity
    will start to operate in 2001.
    - Shannxi Jingbian natural gas power plant with 2 X 300,000 kW.
    - Lanzhou natural gas power plant with 600,000 kW.
    - Fujian LPG power plant with 1.2 to 2.4 million kW.
    - Guangxi Xinzhou natural gas power plant with 1.4 million kW.
    - Guangzhou Huizhou natural gas power plant with 3 X 330,000 kW.
    - Henan Zhengzhou natural gas power plant with 2 X 300,000 kW.
    - Shanghai, Jiangsu, and Zhejiang will build 8 natural gas power plants to accommodate the West-East Pipeline project.
------------------------------------------------------------------------------------------------------------------
    4.    Qinghai province natural gas burner opportunity
-------------------------------------------------------------------------------------------------------------------
Xining, the capital city of Qinghai province starts to replace coal burners by natural gas burners. Natural gas burners will replace 480 coal burners.
------------------------------------------------------------------------------------------------------------------
    5.    Chongqing city will further promote CNG vehicles
-------------------------------------------------------------------------------------------------------------------
Chongqing city will further promote CNG vehicles in next decade. Chongqing city plans to convert 100,000 CNG vehicles, and to build 450 CNG refueling stations in 2010. China Luneng group has invested 0.24 billion RMB to build CNG stations in Chongqing.
-------------------------------------------------------------------------------------------------------------------
    6.    Beijing city natural gas utilization planning
-------------------------------------------------------------------------------------------------------------------
Beijing city government has made natural gas utilization near term plan in 2001 to 2005 and long term plan in 2001 to 2010.
Natural gas demand in 2005 will be 4 billion cubic meters. The source of natural gas includes Shannxi gas field, Russia gas, and LNG. New projects will start to build to insure the gas supply, including second transmission pipeline from Shannxi to Beijing, Dagang oil field underground gas storage, and city distribution pipeline expansion. Total investment will be 12 billion RMB.
Natural gas demand in 2010 will be 6 billion cubic meters. Importation of Russia
natural gas and LNG will be considered. Natural gas co-generation and natural gas power plants will be developed.
 
===============================================================
 

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