Sinopec Starts Up $9.2B Natural Gas Project

BEIJING (Dow Jones), Mar. 30, 2010

China Petroleum & Chemical Corp., or Sinopec, has started operating its $9.2 billion Sichuan-East China natural gas transmission project, parent company Sinopec Group said in its inhouse newsletter Tuesday.

The project, which has a designed annual capacity of 12 billion cubic meters, will feed China's energy-thirsty eastern areas with natural gas from Sinopec's largest gas field, Puguang, and will increase the company's overall natural gas output this year sharply by about 50%.

The project includes exploration and development in Puguang gas field, acidic gas process, a 1,700 kilometer natural gas trunk pipeline stretching from northeast Sichuan to Shanghai city, and three branch lines reaching cities nearby.

Sinopec plans to produce 4 billion cubic meters of natural gas from this project this year, it said.

By the end of 2009, Sinopec had proven reserves of 451.8 billion cubic meters natural gas in the northeast part of Sichuan province, which is enough for Puguang to produce natural gas for at least 20 years.

The core part of the Puguang gas field now has built up capacity to produce 10.5 billion cubic meters of mixed natural gas per year, Sinopec said.

(Wan Xu contributed to this article.)

Copyright (c) 2010 Dow Jones & Company, Inc.