Signing of the project for transporting coal from Xinjiang to Zhejiang for natural gas production
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Author: Luo Fangfeng. Source: Zhejiang Online. Update date: 2011-12-27. Xinjiang is rich in coal, while Zhejiang, a province with limited energy resources, lacks both coal and gas. How to convert Xinjiang’s coal into gas for use in households and industries in Zhejiang – this dream became a reality at the cooperation meeting held yesterday between Zhejiang and central state-owned enterprises. At yesterday’s meeting on cooperation between Zhejiang and central state-owned enterprises, Sinopec Corporation (hereinafter referred to as “Sinopec”) and Zhejiang signed two projects related to gas use. One of these projects has a total investment of 122.8 billion yuan, making it the largest project discussed at this meeting; it is the Xinjiang-Zhejiang long-distance natural gas pipeline project. This means that in the future, natural gas transported from Xinjiang to Zhejiang will have a direct route. To give some background information, coal-to-natural gas refers to the process in which coal is gasified to produce syngas, which is then subjected to special treatment (methanization) to yield synthetic natural gas (SNG). Compared to coal-to-oil, coal-to-gas has a higher energy efficiency; it is the most effective way of utilizing coal and the optimal method for producing coal-based energy products. At present, the technology for coal-to-natural gas conversion is largely mature, representing an effective method for producing petroleum substitutes. Xinjiang has abundant coal resources, but due to issues such as insufficient railway capacity and high transportation costs, these resources cannot realize their full value; as a result, coal-to-gas conversion has become an important method for transporting coal from Xinjiang. Previously, Zhejiang Energy Group had planned to invest in the construction of a coal-to-natural gas project with an annual production capacity of 10 billion cubic meters in the Zhundong area of Xinjiang. Jundong is an important part of the 14th energy base that is planned to be developed in Xinjiang, and it is also a region where the coal power and coal chemical industries were developed at an early stage. However, with natural gas available, there is still a bottleneck issue regarding its transportation. At present, many coal-to-gas enterprises in Xinjiang are worried about their products not being able to be transported smoothly to the eastern markets. Currently, Lines 1 to 4 of the West-to-East Gas Pipeline carry petroleum, natural gas, and imported gas; there is yet no dedicated pipeline for coal-derived natural gas. In the future, coal-to-natural gas production in Jungdong will enter the interior of the country mainly through two channels: one is via the West-East Gas Transmission pipeline network ； Second, build “point-to-point” coal-to-natural gas pipelines. The Xinjiang-Zhejiang long-distance natural gas pipeline project, jointly developed by Zhejiang Energy Group and Sinopec, is expected to fill this gap. For Zhejiang, this is great news. The Xinjiang-Zhejiang long-distance natural gas pipeline project is jointly invested in and constructed by Sinopec, Zhejiang Energy Group, and Xinjiang Investment and Development (Group) Co., Ltd. The pipeline’s annual gas transport capacity will reach 30 billion cubic meters, with a total investment of over 122.8 billion yuan. Once the project is completed, the products from numerous coal-to-gas projects in Xinjiang will be continuously supplied to the Zhejiang market. In 2011, the total natural gas consumption across the province exceeded 4.2 billion cubic meters. Once the Xinjiang-Zhejiang long-distance natural gas pipeline project is put into operation, it will have an annual gas transport capacity of 30 billion cubic meters, ensuring that 10 billion cubic meters per year of coal-based natural gas produced in Xinjiang can be transported to Zhejiang by Zhejiang Energy. “10 billion cubic meters, which is equivalent to 2.5 times the current total natural gas consumption of the entire province. ”A relevant official from the Investment Planning Department of the Provincial Energy Group said that this can **alleviate the current shortage in natural gas supply**. At present, over 60% of the province’s natural gas is used in industrial purposes; if coal-to-natural gas is successfully delivered to Zhejiang, the proportion allocated for household use can be increased gradually. Regarding the price issue, a representative from the Provincial Energy Group said that it would be roughly on par with current natural gas prices, or perhaps slightly cheaper.
Construction will begin on the new natural gas pipeline from Xinjiang to Zhejiang, with an annual gas transport capacity of 30 billion cubic meters. http://www.sina.com.cn December 29, 2011, 01:45 – Yaxin Network. According to Yaxin Network (reporter Wang Jianlong), construction is set to start on this dedicated natural gas pipeline connecting Xinjiang and Zhejiang, with a total investment of 122.8 billion yuan. It is reported that this is the first coal-to-natural gas pipeline from Xinjiang to the mainland. Once this pipeline is completed, coal-based gas produced by various enterprises in Xinjiang will be able to be delivered directly to the Zhejiang market without having to pass through the West-East Gas Pipeline. ? On December 28, reporters learned from the Investment Planning Department of Zhejiang Energy Group that at the cooperation forum between Zhejiang and central state-owned enterprises held on December 26, Sinopec and Zhejiang signed two projects; among them, the natural gas transmission pipeline project from Xinjiang to Zhejiang is the largest, with a total investment of 122.8 billion yuan. The project is jointly funded and constructed by Sinopec, Zhejiang Energy Group, and Xinjiang Investment and Development (Group) Co., Ltd., with the pipeline’s annual gas transport capacity reaching 30 billion cubic meters. Previously, Sinopec and Xinjiang signed a strategic cooperation framework agreement in Beijing, aiming to promote Sinopec’s activities in oil and gas exploration and development in Xinjiang, the construction of natural gas pipelines leading out of the region, coal-to-natural gas and other coal chemical projects, as well as operations in refining, petrochemicals, oil product sales, and related infrastructure. Xinjiang, together with Zhejiang Province and Sinopec, submitted a report to the National Development and Reform Commission regarding the construction of a dedicated \"point-to-point\" coal-to-natural gas pipeline from Xinjiang to Zhejiang. “It is estimated that the total natural gas consumption in our province this year will exceed 4.2 billion cubic meters, making it one of the years with the most severe shortages in gas supply. Our group has planned to invest in the construction of a coal-to-natural gas project with an annual production capacity of 10 billion cubic meters in the Zhundong region. Once the Xinzhè Natural Gas long-distance pipeline project is put into operation, all the natural gas produced by this project will be able to reach Zhejiang. ”A relevant official from the Investment Planning Department of Zhejiang Energy Group said. According to incomplete statistics, 20 coal-to-gas projects in Xinjiang have begun preliminary work and construction. Among them, the coal-to-gas projects of China Power Investment and Xinwen Mining, the Yili Xintian coal chemical project, and the first phase of the Qinghua Group’s project are under construction. The second phase of the Qinghua Group’s project is in the planning stage, while the coal-to-gas projects of companies such as Huaneng, Huadian, China National Coal Group, State Power Investment Corporation, Lu’an, and Xuzhou Mining are in the preliminary stages. Once these projects are completed and put into operation, their annual production capacity will reach 76.7 billion cubic meters. In order to facilitate the rapid export of coal-to-gas production from Xinjiang, Sinopec approved the establishment of the Sinopec Xinjiang Coal-to-Natural Gas Export Pipeline Project Department and Xinjiang Coal-to-Natural Gas Export Pipeline Co., Ltd., and signed gas supply agreements with 8 upstream coal-to-gas project operators, including China Power Investment Xinjiang Company. Sun Zhonghui, chairman of Yili Energy Company under Xinwen Mining Group and member of the Party committee, told reporters that the facilities for the first phase of the project, which has an annual production capacity of 2 billion cubic meters of coal-to-natural gas, are currently under construction; the company has also signed a gas supply agreement with Sinopec. Wang Jinlin, deputy general manager of Xinjiang Qinghua Energy Group, said that the first phase of the group’s project to produce 5.5 billion cubic meters of coal-to-natural gas per year, which involves the production of 1.375 billion cubic meters of coal-derived gas, has entered the construction stage. It is scheduled to come online by June next year, and the coal-to-natural gas produced will be fed into the \"West-East Gas Transmission\" pipeline, allowing it to be delivered to the interior regions of the country. It is reported that between 2011 and 2015, Xinjiang will begin construction of the Third, Fourth, and Fifth West-East Gas Pipelines, as well as two pipelines for transporting natural gas produced from coal. Currently, Line 1 of the West-to-East Gas Pipeline has an annual transportation capacity of 17 billion cubic meters and is in operation. The annual transportation capacity of Lines 2, 3, 4, and 5 of the West-to-East Gas Pipeline Project is 30 billion cubic meters each. Line 2 is already in operation, Line 3 is ready for construction, while Lines 4 and 5 are under planning. The New Guangdong-Zhejiang coal-to-natural gas pipeline and the New Shandong coal-to-natural gas pipeline are under planning, with an annual transport capacity of 30 billion cubic meters each. By then, Xinjiang’s annual total transportation capacity will reach 197 billion cubic meters. Several companies in Xinjiang that are involved in the planning and construction of coal-to-natural gas projects believe that the estimated coal reserves in Xinjiang amount to about 2.19 trillion tons, accounting for over 40% of the country’s total reserves. Ili and Junggar are suitable locations for the development of coal-to-natural gas projects. Lines 1 to 4 of the West-East Gas Pipeline Project were built to transport oil, natural gas, and imported gas; Xinjiang does not yet have any dedicated pipeline for coal-to-natural gas production. The price of gas supplied by Line 1 of the West-East Gas Pipeline Project is 0.5–0.6 yuan per cubic meter, while the production cost of coal-to-natural gas in Xinjiang is expected to exceed 1 yuan per cubic meter. It will be difficult to integrate coal-to-natural gas projects into the West-East Gas Pipeline System once they are operational, in order to transport the gas to the interior regions of the country. The construction of the new Zhejiang-Natural Gas Pipeline will not only fill the gap in Xinjiang, where there is no dedicated pipeline for coal-to-natural gas, but it will also promote the development of the coal-to-gas industry in that region.