China starts constructing 3rd west-to-east gas pipeline

BEIJING - Construction of China's third pipeline that will send natural gas from the nation's resource-rich western regions to the energy-starved east started on Tuesday.

The pipeline is expected to transmit 30 billion cubic meters of gas annually. It will measure 7,378 km and cross 10 provinces and autonomous regions, including Xinjiang, Gansu and Ningxia.

The third pipeline is a key project approved this year by the State Council, the country's Cabinet. It consists of one trunk line and eight branch lines.

The trunk line will measure 5,000 km. It will start from Horgos in Xinjiang and end at Fuzhou, capital city of Fujian.

The project is expected to be completed before 2015. Around 25 billion cubic meters of gas will come from central Asian countries each year, while five billion cubic meters of gas will come from Xinjiang, according to the China National Petroleum Corporation (CNPC).

The new project is expected to cost 125 billion yuan ($19.7 billion) to build, according to the CNPC.

It is likely to increase the share of natural gas in China's primary energy consumption by one to two percentage points, meaning the replacement of 76.8 million tonnes of coal and a reduction of emissions of 130 million tonnes of carbon dioxide, 1.44 million tonnes of sulfur dioxide and 660,000 tonnes of dust.

Ceremonies were held in Beijing, Fujian Province in east China, and Xinjiang Uygur autonomous region in the northwest to mark the launch of the construction.

Chinese Vice Premier Li Keqiang extended his congratulation. The new project will provide hundreds of millions of residents with clean and reliable natural gas, improve energy structure and enhance energy saving and emission reduction, he said.

The project will also boost balanced development between regions, expand domestic consumption and support economic and social development by promoting related industries like equipment-manufacturing and materials, according to Li.

The CNPC, Baosteel and China's Social Security Fund agreed in May to invest in the scheme through a joint venture company. The project is also open to private investment.

As the top shareholder of the joint venture company, the CNPC holds a 52-percent stake.

The first pipeline, crossing 10 provincial regions, has transferred more than 138 billion cubic meters of gas since 2004. It starts from Xinjiang and ends in Shanghai.

The second pipeline, measuring around 8,700 km, can transfer 30 billion cubic meters of gas annually, and will be fully operational by the end of the year. It runs from Xinjiang to Guangdong Province in the south.

The fourth and fifth pipelines are under planning, according to Jiang Jiemin, chairman of the CNPC. China aims to build a nationwide natural gas network that connects with overseas resources in future.