CNOOC’s coal-to-gas pipeline project approved by four provinces and municipalities

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CNOOC’s coal-to-gas pipeline project approved by four provinces and cities Author/Source: Date: May 10, 2016 Clicks: 2 According to news from May 6, the route plan for the Tianjin LNG link of CNOOC’s Mengxi coal-to-natural gas transmission pipeline project has been approved by the authorities in Tianjin. Thus, the full route plan for the Mengxi Pipeline has been approved by the relevant authorities in the four provinces, municipalities, and autonomous regions along its path: Inner Mongolia, Shanxi, Hebei, and Tianjin. The main pipeline of the CNOOC Mengxi coal-to-natural gas transmission project is 1,279 kilometers long; it starts at the first station in Hangjin Banner, Inner Mongolia, passes through Shanxi, Hebei, and Tianjin, and ends in Huanghua City, Cangzhou. The project mainly consists of line engineering, process stations and facilities, as well as their auxiliary supporting projects. The pipeline project includes 1 main line, 2 feed branches, 1 distribution line, and 1 tie line. The Tianjin LNG link line will expand the market for the already operational Tianjin LNG facility, via the Mengxi pipeline, to Hebei and Beijing, and create a mutual support system with coal-based natural gas, thereby further enhancing CNOOC’s ability to ensure a stable supply of natural gas to the Beijing-Tianjin-Hebei region. During the 12th Five-Year Plan period, China National Offshore Oil Corporation planned to develop and construct the \"North Route Project\" for coal-based clean energy. The coal-based clean energy “North Route Plan” project consists of the Demonstration Project for the Clean Utilization of Low-grade Bituminous Coal in Datong, Shanxi, China National Offshore Oil Corporation’s coal-to-natural gas project with an annual production capacity of 4 billion standard cubic meters in Ordos, and CNOOC’s coal-to-natural gas pipeline project for transporting gas from Mengxi. CNOOC has made synthetic natural gas (SNG) the main focus of its efforts to develop coal-based clean energy, aiming to build a new energy industry framework and achieve another stage of growth. On March 4, 2016, the environmental impact assessment for the demonstration project on the clean utilization of low-metamorphic bituminous coal in Datong, Shanxi was approved ； On August 7, 2015, the **Ministry of Environmental Protection officially accepted the environmental impact assessment documents for CNOOC’s Ordos coal-to-natural gas project with an output of 4 billion standard cubic meters per year. The CNOOC Mengxi coal-to-natural gas transmission pipeline project mainly consists of the pipeline engineering, process stations and facilities, as well as their supporting infrastructure. The pipeline network includes 1 main line, 2 feed branches, 1 distribution branch, and 1 tie line. The gas transmission volume in Phase 1 of the project is 200×108 Nm3/year, while in Phase 2, it will reach 300×108 Nm3/year, depending on the operation status of the upstream gas sources. The main pipeline starts at the Hangjinqi Terminal in Hangjinqi County, Inner Mongolia, and passes through four provinces, autonomous regions, and municipalities directly under the Central Government – Inner Mongolia, Shanxi, Hebei, and Tianjin – before reaching the Huanghua Terminal in Huanghua City, Hebei Province. Its total length is approximately 1,020 km ； The injection branch pipelines include the Daliu injection branch and the Zuyun injection branch, with lengths of 34 km and 36 km respectively ； The branch pipeline is the Langfang branch pipeline, with a length of approximately 84 km ； The connecting line is the Tianjin connecting line, with a length of approximately 77 km. The diameter of the main line in Inner Mongolia is Ф1219/914 mm, with a design pressure of 10/12 MPa ； The diameter of the main line in Shanxi section is Ф1219mm, with a design pressure of 12MPa ； The diameter of the main line section in Hebei is Ф1219mm, with a design pressure of 12/10MPa ； The diameter of the Tianjin section of the main line is Ф1016/914 mm, with a design pressure of 10 MPa. The main pipeline feeds into a branch pipe with a diameter of Ф1016mm, and the design pressure is 10/12 MPa ； The left cloud injection branch pipe has a diameter of Ф914mm, with a design pressure of 10/12MPa. The diameter of the Langfang branch pipeline is Ф711mm, with a design pressure of 10MPa ； The diameter of the Tianjin LNG tie-line is Ф1016mm, with a design pressure of 7.5/10MPa. In March and April 2016, the website of the Ministry of Environmental Protection issued, one after another, the \"Approval on the Environmental Impact Assessment Report for the Demonstration Project on the Clean Utilization of Low-Grade Bituminous Coal by China National Offshore Oil Corporation in Datong, Shanxi\", the \"Approval on the Environmental Impact Assessment Report for Su New Energy and Feng Co., Ltd.’s Project to Produce 4 billion standard cubic meters of coal-to-natural gas per year\", and the \"Approval on the Environmental Impact Assessment Report for Inner Mongolia Beikong Jingtai Energy Development Co., Ltd.’s Project to Produce 4 billion cubic meters of coal-to-natural gas per year\". Together, these three projects have a total coal-to-natural gas (SNG) production capacity of 12 billion cubic meters per year. Coal-to-oil and coal-to-natural gas are considered important means of ensuring China’s energy security, and they are welcomed by local authorities due to their large scale of investment and economic output. Although the persistent low levels of international oil prices have raised doubts about the economic viability of coal-to-oil and gas projects, the currently low prices of steel significantly reduce project investment costs. Excess coal production provides a supply of raw materials at low prices, while low interest rates decrease financing costs – all of these factors contribute to improving the profitability of new coal-to-oil and coal-to-gas projects.