Gas’ing Up: China Pays For a Central Asian Pipeline

I noticed via The International Herald Tribune, that China’s biggest oil company – China National Petroleum Corp. – has agreed to spend US$2.2 billion to help build a natural gas pipeline from Turkmenistan that will eventually supply energy for booming cities such as Shanghai.  Just yet another matching of mutual interests – China’s desire to lock in energy supplies while Turkmenistan’s desire to develop alternate export routes to the current Gazprom controlled pipeline infrastructure.  As the article notes:

“…The publicly listed PetroChina and China National Oil and Gas Exploration and Development Corp., both subsidiaries of CNPC, will each provide 8 billion yuan (US$1.1 billion, €750 million) in cash for the planned 1,818-kilometer (1,130-mile) pipeline, Xinhua News Agency said late Friday, citing an announcement from PetroChina.

The project was estimated to cost US$7.3 billion (€5 billion) in total, Xinhua said, but its report did not mention where the remaining funds would come from.

The pipeline will run through Uzbekistan and Kazakhstan before reaching northwest China, Xinhua said. The pipeline will be connected with China’s second West-to-East gas pipeline, which was expected to be operational by 2010 and reach eastern and southern China, including Shanghai and Guangdong province.

In July, CNPC signed a 30-year contract to buy gas from Turkmenistan, importing 30 billion cubic meters of natural gas annually.

CNPC Exploration and Development Co. will build the pipeline in cooperation with two state-owned development companies in Kazakhstan and Uzbekistan, Xinhua said….”

This entry was posted on Sunday, December 30th, 2007 at 3:56 pm and is filed under China, China National Petroleum Corporation, Gazprom, Russia, Turkmenistan.  You can follow any responses to this entry through the RSS 2.0 feed.  Both comments and pings are currently closed. 

Comments are closed.

Wildcats & Black Sheep is a personal interest blog dedicated to the identification and evaluation of maverick investment opportunities arising in frontier - and, what some may consider to be, “rogue” or “black sheep” - markets around the world.

Focusing primarily on The New Seven Sisters - the largely state owned petroleum companies from the emerging world that have become key players in the oil & gas industry as identified by Carola Hoyos, Chief Energy Correspondent for The Financial Times - but spanning other nascent opportunities around the globe that may hold potential in the years ahead, Wildcats & Black Sheep is a place for the adventurous to contemplate & evaluate the emerging markets of tomorrow.