CNPC completes China's first 30 Bcm/year synthetic coal gas pipeline

Singapore (Platts)--16 Jul 2013 126 am EDT/526 GMT

State-owned China National Petroleum Corp said Tuesday that it has commissioned China's first dedicated synthetic coal gas pipeline in western Xinjiang province.

The 30 billion cubic meter/year Yining-Horgos pipeline passes through Yining city and Huocheng county in Xinjiang. Construction of the 64-km pipeline started in May 2011, and inspections and certifications wrapped up this May. It cost Yuan 996 million ($162.3 million).

The company said it successfully flowed gas from its Second West-East gas pipeline into the Yining-Horgos pipeline on July 10.

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However, the new pipeline will ultimately connect to CNPC's Third West-East gas pipeline, where construction started in October. That pipeline is slated to be fully operational by 2015.

The Yining-Horgos pipeline's main function is to transport synthetic coal gas supplies from coal-to-gas producers in Xinjiang to the Third West-East gas pipeline. It will also transmit up to 5 Bcm/year of gas to customers along its route before reaching the Third West-East pipeline, CNPC said, without giving a timeline.

Before the coal-to-gas projects start producing, however, the Yining-Horgos project will be a reverse-flow pipeline, supplying these coal-to-gas plants' intended customers with imported Central Asian gas from the Third West-East pipeline, the company said, again without saying when the projects would start.

The $20 billion Third West-East pipeline will have capacity of 30 Bcm/year and will start in Horgos in Xinjiang on the border with Kazakhstan -- the same starting point as the Second West-East pipeline. It will link up with the Central Asia-China gas pipeline network and transport Central Asian gas from western China to the eastern coast, with multiple spurs along the way.

CNPC signed a strategic cooperation agreement with the local government in Xinjiang last December, pledging to develop coal-to-gas projects in the coal-rich province.

Rival Sinopec is also developing two cross-country coal-to-gas pipelines from Xinjiang to China's eastern coast by 2015.

--Song Yen Ling,

--Edited by Meghan Gordon,

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