BEIJING Nov 7 China's first coal-to-gas (CTG)
project will soon start pumping gas to capital city Beijing to
help meet winter heating demand, coming online after a one-year
delay due to an unfinished pipeline, said an industry official
involved on the project.
China is spending $14 billion on projects to turn coal in
remote regions into natural gas, a costly bet that could help
meet the country's surging demand for the fuel.
State-owned utility Datang Power, parent of Datang
International Power Generation Co Ltd ,
expects to switch on the taps in the coming weeks at its pilot
CTG plant in north China's Inner Mongolia to deliver an initial
4 million cubic metres of gas each day to Beijing.
The project was ready for operation in July last year, but
construction of the last leg of a 430-kilometre pipeline being
built by a unit of state energy giant PetroChina
has taken longer than expected.
"PetroChina's delay in building the pipeline is the main
reason for the project delay," said the industry official,
adding that Datang has already built the portion of the pipeline
from the Inner Mongolia plant to the border of Beijing.
PetroChina, China's top oil and gas producer, is the main
operator of the country's 53,000 kilometres of pipelines that
connect gas fields to the main consumption centres.
While the state sets pipeline transmission fees, PetroChina
has a big say in whose gas gets delivered into the trunklines
first at what price, which has been a source of complaint among
smaller, newer gas producers such as coalbed methane explorers.
A PetroChina press official was unable to provide immediate
The Datang plant, costing a total of around 25.7 billion
yuan ($4.22 billion) according to state media Xinhua, is the
first of four CTG pilot projects Beijing has approved that are
expected to supply 15 bcm of natural gas a year by 2015, around
7 percent of China's gas demand expected for that year.
The Chinese government has over the past few weeks called
for boosting gas supplies, including from new suppliers like
Datang, as demand for the fuel rose faster than
Beijing is expected to see gas use hit a record 80 million
cubic metres per day during the peak heating period in the
coming winter months, the government said.
Datang is already building the second phase of the Inner
Mongolia plant, and expects to start operation in the third
quarter of 2014, the company has said.
A following third-stage investment will boost total capacity
at the plant to 4 bcm/year in 2015, from an initial capacity of
about 1.33 bcm/year.
($1 = 6.0927 Chinese yuan)
(Reporting by Chen Aizhu and Beijing newsroom; Editing by Tom