The nation's biggest oil producer, PetroChina, yesterday said it has obtained the government's final approval to build two cross-China pipelines.

These will pump refined oil, such as gasoline and diesel, from northeastern and northwestern areas to Central China.

The two pipelines will start from Lanzhou, in Northwest China's Gansu Province, and Jinzhou, in Northeast China's Liaoning Province, and converge in Zhengzhou, in the central province of Henan.

A further extension will reach Changsha, the capital city of Hunan Province, south of Henan, PetroChina sources yesterday said.

"We received final approval from the State Council a couple of weeks ago to start building the two pipelines," said a senior PetroChina official, who did not want to be identified.

Industry sources said Central China is expected to suffer from severe oil shortages, which could see it short of about 10 million tons of refined oil products in 2010.

Beijing-based PetroChina will be the only builder and will invest about 12 billion yuan (US$1.5 billion) in the construction, Zhu Shihou, an official overseeing energy projects at the Henan Development and Reform Commission, said.

The PetroChina official said it would take one or two years to build the pipelines. "So we expect, as originally planned, to put the two lines into operation by next year or in 2008," he said.

The pipeline from Lanzhou is expected to carry 8 million tons of refined oil a year; the Jinzhou route is designed to have an annual capacity of up to 4 million tons, local media reports said.

The pipelines will pump oil from refineries in north-eastern and north-western regions, which will process crude oil imported from Russia and Kazakhstan. This will arrive in China through cross-border oil pipelines, the PetroChina official said.

China and Kazakhstan in December jointly announced the formal opening of their first cross-border crude oil pipeline, which pumps crude oil from the Central Asian country to Alashankou, in Northwest China's Xinjiang Uygur Autonomous Region.

The Chinese-Kazakh pipeline will initially carry 10 million tons of crude oil a year.

Another pipeline project is also under discussion between China and Russia, which could transport about 30 million tons of crude oil a year.

Source: China Daily