Xinjiang’s coal-to-gas transmission pipeline approved by the National Development and Reform Commission

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Recently, the **National Development and Reform Commission officially approved the Sinopec Xinjiang coal-to-gas pipeline project through the document titled \"Approval on the Approval of the Xinjiang Coal-to-Gas Pipeline Project\" (NDRC Energy [2015] No. 2295), marking the onset of the full-scale construction phase for this project. The water resource assessments for the associated coal-to-gas projects – Sinopec with a capacity of 8 billion cubic meters per year, Longyu with 4 billion cubic meters per year, and Zhejiang Energy with 2 billion cubic meters per year – have been approved by the Yellow River Water Resources Commission under the Ministry of Water Resources; approval is expected to be granted by the end of the year. According to reports from Huahua Network, the Sinopec Xinjiang coal-to-gas transmission pipeline project (Xin Yue Zhe Pipeline) began to be planned and constructed in 2011, with Sinopec Xinjiang Coal-to-Natural Gas Pipeline Transmission Co., Ltd. as the contractor. As a major energy project under the 12th Five-Year Plan, the total investment in this project amounts to 132.217 billion yuan. Its main construction components include 1 main pipeline and 6 branch pipelines, with the pipelines running through 13 provinces (regions) including Xinjiang, Gansu, Ningxia, Shaanxi, Henan, Shandong, Hubei, Hunan, Guangdong, Guangxi, Jiangxi, Zhejiang, and Fujian. The main pipeline starts in Mulei County, Changji Prefecture, Xinjiang, and ends in Shaoguan, Guangdong, with a total length of 4,159 kilometers. Its designed capacity is 30 billion cubic meters per year. There are 6 branch pipelines, namely the Zhundong Branch, Yili Branch, South Xinjiang Branch, Henan-Shandong Branch, Jiangxi-Fujian-Zhejiang Branch, and Guangxi Branch, with a combined total length of 4,213 kilometers. On July 2, the Ministry of Environmental Protection issued the \"Announcement by the Ministry of Environmental Protection on the Decisions Regarding the Approval of Environmental Impact Assessment Documents for Construction Projects and the Approval of Environmental Protection Inspections upon Completion of Such Projects, issued from June 16, 2015, to July 1, 2015.\" In this announcement, a decision was made regarding the environmental impact report for Sinopec’s Xinjiang coal-to-gas transmission pipeline project (Xin-Yue-Zhe pipeline), with the approval reference number being Huan Shen [2015] No. 149. On June 26, Su New Energy Company and the Natural Gas Division of Sinopec Corporation officially signed a purchase and sale agreement for 4 billion cubic meters per year of coal-to-natural gas. Under the terms of the agreement, Sinopec Natural Gas Company will acquire all the coal-to-gas output generated by the Su New Energy project once it goes into operation. Specifically, the acquisition volume in 2019 will be around 1 billion cubic meters per year, rising to 4 billion cubic meters per year thereafter, with the gas being transported via the newly planned New Guangdong-Zhejiang pipeline for sale in the mainland. The agreement also sets out relevant provisions regarding price, quality, and other matters. On June 15, Xinjiang Longyu Energy Zhundong Coal Chemical Co., Ltd. and the Natural Gas Division of Sinopec Corporation officially signed a purchase and sales agreement for 4 billion cubic meters per year of coal-to-natural gas. Under the agreement, the Natural Gas Division of Sinopec Corporation will acquire in its entirety the coal-to-natural gas that Xinjiang Longyu Energy Zhundong Coal Chemical Co., Ltd. plans to produce starting in 2019, and transport it to the mainland for sale via the proposed Xinyuezhe pipeline. On August 7, Guanghui Energy announced that its wholly-owned subsidiary, Xinjiang Fuyun Guanghui New Energy Co., Ltd., had signed a Framework Agreement on the Purchase and Sale of Natural Gas via the Pipeline for Transporting Coal-to-Gas Production in Xinjiang with the Natural Gas Division of Sinopec Corporation.