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Boom seen for energy pipelines

By Fu Chenghao (Shanghai Daily)
Updated: 2007-02-26 10:57

China plans to extend its oil and gas pipelines by nearly 63 percent by 2010 to meet rising energy demand, according to the nation's key pipeline builder.

Around 25,000 kilometers of energy pipelines will be added in the period, Su Shifeng, director of the China Petroleum Pipeline Bureau, was quoted as saying late last week by Xinhua news agency. China now has 40,000 kilometers of energy pipelines.

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Key projects that may help achieve the target include China's proposed second west-east pipeline to transport natural gas from theXinjiangUygur Autonomous Region to inland and coastal areas. The government has been studying the route for the new line, and construction may kick off before 2010.

China completed its first west-east pipeline in 2004. The 4,000-kilometer line links Tarim in energy-rich Xinjiang andShanghai.

China is also seeking opportunities to build cross-border pipes into countries such as Russia. China's only such cross-border link at present is a crude pipeline that connects Xinjiang and Kazakhstan.

Rising global demand for oil pipelines and refinery facilities, sustained by high energy prices, is benefiting equipment manufacturers, analysts said.

For example, Luxembourg-based Tenaris SA, the world's top maker of oil pipes, reported a 45 percent jump in earnings in the third quarter last year.

"Rising steel prices and a worldwide shortage of qualified engineers and welders" have also forced some energy companies to delay or cancel some of their projects, said CLSA Ltd analyst Gordon Kwan.