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West-East Gas Pipeline Construction Project Finalized

At the China LNG International Conference 2008, held on the 16th, a major development was announced regarding the second phase of the West-East Gas Pipeline project. After extensive discussions and planning, the construction plan for the second line was finalized, marking a significant step in China's energy infrastructure expansion. The total investment for the project is expected to reach 143.49 billion yuan, with a designed annual gas transmission capacity of 30 billion cubic meters. Hou Chuang, deputy general manager of the Natural Gas and Pipeline Branch at China National Petroleum Corporation, explained that the second trunk line will start from Khorgos Port, passing through Dushanzi, Urumqi, and then connecting with the Hongliu and existing West-East Gas Pipelines. The pipeline will overlap with the main line before diverging eastward near Zhongwei in Ningxia, after crossing the Yellow River. From there, it will continue through Jiuquan, Shandan, Wuwei, Xi’an, Nanchang, and Cangzhou, eventually reaching Guangzhou in the southeast. The main pipeline will span approximately 4,945 kilometers in total. In addition, several branch lines are planned, including the Lunnan-Tulufan line in Xinjiang, the Zhongwei-Jingbian line in Ningxia, the Luoyang-Xuzhou line in Henan, the Nanchang-Shanghai line in Jiangxi, the Yushu-Xiangtan line in Hunan, the Wengyuan-Shenzhen (Hong Kong) line in Guangdong, the Guangzhou-Nanning line in Guangxi, and the Zhaoqing-Zhanjiang (Haikou) line in Guangdong. These branch lines will add another 3,849 kilometers to the overall network. Regarding pricing, Hou mentioned that the gate station prices for the second phase will be set based on international market rates, taking into account the domestic demand and consumption capacity. The average price in second-tier cities is expected to exceed RMB 3 per cubic meter. Moreover, if the pipeline transportation fees are calculated in a tiered manner, the final price in coastal regions could be even higher due to increased distribution costs. Another key aspect of the project includes the construction of three underground gas storage facilities: Pingdingshan in Henan, Yunying Salt Cavern in Hubei, and Machang Water Storage in Nanchang. These facilities will have a combined working gas volume of 2.2 billion cubic meters, along with one LNG peaking station to ensure supply stability during peak demand periods. According to the official plan, the second West-East Gas Pipeline is scheduled to begin operations in 2010, with full capacity expected to be reached by 2012, delivering 30 billion cubic meters of natural gas annually. This expansion is expected to significantly enhance China’s energy security and support the country’s growing energy needs, especially in the eastern and southern regions.

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