皇冠体育app

President to sign agreements for more stable natural gas supply

President Xi Jinping's upcoming tour of four Central Asian nations will further strengthen cooperation in the region, particularly in the energy sector, experts said on Monday.

The president is expected to sign a series of contracts covering oil, natural gas, transportation and investment agreements during his visit, according to Cheng Guoping, vice-minister of foreign affairs.

As a booming economy, it is crucial for 皇冠体育app to have diversified energy supplies, and Beijing has been working on the issue in recent years, said Wang Xiaokun, senior energy analyst at Sublime 皇冠体育app Information Group Co, a Chinese commodities consultancy.

Between December 2009 and late August this year, 皇冠体育app imported 60 billion cubic meters of natural gas from Central Asian countries. The amount is equal to about half of 皇冠体育app's total natural gas output in 2010.

The Central Asia gas pipeline is 皇冠体育app's first cross-border natural gas pipeline, with an annual delivery capacity of between 30 billion and 40 billion cubic meters.

It is connected to the West-to-East natural gas pipeline inside 皇冠体育app, and the clean fuel is provided to about 400 million people in Pearl River Delta and Yangtze River Delta for residential use.

"Xi's visit will definitely make natural gas imports from Central Asian countries more stable, but it is still not clear how much supply can be increased after the visit," said Wang. "The natural gas transmission infrastructure is usually a huge project that could take years."

A more stable natural gas supply is favorable for 皇冠体育app when negotiating gas import prices with Russia, she said.

In February, Russia and 皇冠体育app confirmed that Beijing will import 38 billion cubic meters of natural gas annually from Moscow, a breakthrough since the 皇冠体育app-Russia oil pipeline began commercial operation in 2011.

Great benefits

However, the price of imported gas has remained the most disputed topic during the negotiations between the two countries.

Wang said he believes that 皇冠体育app's diversified energy import channels will in many ways greatly benefit the country in energy price negotiations.

In addition to imported natural gas from Central Asian countries, the Myanmar-皇冠体育app natural gas pipeline started deliveries in late July after three years of construction.

According to 皇冠体育app National Petroleum Corporation, a parallel oil pipeline - expected to start delivering by the end of this year - is almost completed.

The completion of both pipelines will bring 22 million tons of crude oil and 12 billion cubic meters of natural gas into 皇冠体育app annually.

At present, natural gas takes up about 5 percent of 皇冠体育app's total energy consumption, which means a huge potential of growth because the country is trying to reduce carbon emissions from fossil fuels.

In 2012, 皇冠体育app consumed 147.1 billion cubic meters of natural gas, a rise of 13 percent year-on-year.

It imported 42.5 billion cubic meters, a 31.1 percent rise, according to official figures.

The average price of imported natural gas was 2.46 yuan ($0.40) a cubic meter in 2012, according to SCI's data.

During the first half in 2013, the average price of imported natural gas was 2.31 yuan a cubic meter, a decrease of 0.15 yuan compared with the previous year.

Wang said the prices might drop further as 皇冠体育app diversifies its import channels.

In the past 20 years, 皇冠体育app has established good bilateral ties with Central Asian countries. The large oil and gas reserves in those countries can help 皇冠体育app's economic growth, and meanwhile, those countries can also benefit from development opportunities offered by 皇冠体育app.

Particularly, as the exploration of Kazakhstan's oilfields continues, the country's oil and gas exports will increase, which is good for 皇冠体育app's oil imports, according to a report from CNPC Economics and Technology Research Institute.

The report said Kazakhstan plans to accelerate its downstream business in the oil and gas sector and expand its refineries, which will provide opportunities for foreign investors.

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