Shanghai Project to Tap More Gas in East China Sea

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Last updated at: (Beijing Time) Sunday, August 18, 2002

Shanghai Project to Tap More Gas in East China Sea

The Pinghu Oil and Gas Field off the East China Sea, now Shanghai's only natural gas supplier, began its expansion project Friday to secure its grip on market share before rivals from west China reach Shanghai.

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In an effort to meet the growing local demand for natural gas, Shanghai kicked off a 1.7 billion yuan (US$205 million) project yesterday to increase the supply from the East China Sea, the city's sole source of the environmentally friendly energy.

Run by Shanghai Petroleum Corp (SPC), a major local prospector and developer, the massive project aims to raise the daily supply of natural gas from the Pinghu oil and gas field in the East China Sea from the present 1.2 million cubic metres to 2 million cubic metres by the end of 2003.

The project includes the construction of a new drilling platform, eight drilling wells, auxiliary pipelines and cables as well as renovation of present facilities, according to Li Quan, spokesman for SPC.

Due for completion in 2005, such a capacity expansion project is regarded by local authorities as part of the city's efforts to scale down its dependence on coal, still a major source of industrial power, and instead concentrate on natural gas, a greener energy alternative.

The city government is viewing the expansion project as an important move to guarantee a safe and steady long-term gas supply for Shanghai's future development.

"We need to further expand the use of natural gas to improve the local energy structure to foster a better environment for local residents," said Vice-Mayor Han Zheng.

Relying on the supply from the East China Sea, Shanghai used 283 million cubic metres of natural gas last year.

The city's demand for clean energy is soaring, as natural gas is replacing coal gas in households and taxis. By the end of 2003, another 300 gas-fueled buses will hit the road in Shanghai.

At present, natural gas accounts for less than 3 percent of the city's energy consumption.

The city's Pudong (east of the Huangpu River) District is already set up for natural gas use, and Shanghai is busy extending the pipeline network into its Puxi (west of the Huangpu River) area.

Shanghai is scheduled to receive the first flow of natural gas from Northwest China in 2003 thanks to the country's multi-billion dollar west-east gas transmission project.

With the arrival of the western supply alongside the expansion project launched yesterday, the city expects its annual use of natural gas will amount to 1.2 billion cubic metres by 2005.

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