January 4, 2010 / 5:20 AM / 10 years ago

China eyes LNG import deals, private oil stockpiles

* China hopes for more LNG import deals

* To develop private oil stockpiles

* To consider checks on coal output and demand

* China cautious on approving coal to gas and oil projects

BEIJING, Jan 4 (Reuters) - China hopes to clinch more deals on liquefied natural gas (LNG) imports and speed up construction of LNG receiving terminals, gas pipeline and storage facilities this year, the country’s energy head said.

The country will take advantage of excess supply in the international LNG market now to speed up negotiations of overseas gas purchases, Zhang Guobao said in remarks published on Monday in the China Energy News, a newspaper run by the official People’s Daily.

Zhang, head of the National Energy Administration, said construction of LNG receiving terminals including Zhuhai, Shenzhen and Shandong will be pushed forward this year.

(For a factbox of China’s LNG import deals, please click [ID:nPEK161692]. For a factbox of import terminals, click [ID:nPEK68536])

China will further develop major gas fields in central and western China as well as offshore gas resources to maintain fast increases in domestic gas output, Zhang said in a national energy conference last week.

China will approve a third gas pipeline linking Shaanxi and Beijing and a new pipe connecting Qinghuangdao city in Hebei province to Shenyang, capital of northeastern Liaoning province, he said.

Zhang also said China would expand oil reserves by developing private storage capacity, in addition to the second phase of state oil stockpiles.

(For a factbox on China’s strategic oil reserve plan, please click:[ID:nPEK162917])

China will push ahead with planned joint oil refining projects including the 400,000 barrel-per-day (bpd) Jieyang refinery between China and Venezuela, the 300,000-bpd Guangdong refinery between China and Kuwait and the 200,000-bpd Tianjin refinery between China and Russia, he said.

Zhang said one of the government’s major tasks this year were to work on an energy development plan for the five years through 2015 and on scientific forecasts for energy demand by 2020.

To realise the goal of boosting non-fossil fuels to 15 percent of energy consumption by 2020, China needs to have more than 300 gigawatts of hydropower generating capacity, 70 GW of nuclear power capacity, and output from renewable sources including wind and solar power topping 150 million tonnes of coal equivalent by then.

“The development of hydropower, nuclear power, wind power and solar energy have to be increased further if energy demand grows too fast, or the goal will not be achieved.”

Zhang said China will not allow coal production and consumption to grow without any restraints as it will result in serious environmental pollution and coal mine accidents.

“Fast increases in coal output and demand also pose intense pressure and difficulty to cope with climate change.”

He also said his administration would insist on a cautious approach in approving coal-to-gas and coal-to-oil projects.

The approval of the coal to gas project in Inner Mongolia by Huineng Group and the Fuxin project in Liaoning by Datang should be considered only after the successful start-up of Datang’s coal-to-gas project in Inner Mongolia.

“It is time to summarise the experience of the direct coal-to-oil project by Shenhua Group and indirect coal-to-oil projects by Yitai and Lu’an to perfect coal to oil technologies,” he said. (Reporting by Jim Bai and Chen Aizhu; Editing by Jacqueline Wong)

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