Russian energy giant will team up with China National Petroleum Corp (CNPC) to build 300 gasoline stations in China, in a move to tap China’s huge gasoline market.
A joint venture has been established between Rosneft, Russian’s largest oil supplier, and CNPC that will set up around 300 gas stations and process 10 million tons of crude oil a year, Rosneft announced here Friday.
The CNPC will own 51 percent the company and Rosneft the remainder, said President Sergei Bogdanchikov.
He told Xinhua that the the 300 service stations will use gas from China or Russia depending on which is less expensive.
Shell, Total and Exxon-Mobile also have schemes to set up joint venture filling stations in China, vying for a slice of the country’s refined oil market that have been pledged to be fully open to foreign competition by the end of 2006.
Rosneft’s combined oil supply to China in 2006 will total 12.5 to 13 million tons.
Rosneft is projected to transmit 1.5 million tons of oil to China through the Atasu-Alataw Pass pipeline linking China and Kazakhstan.
Source: Xinhua   http://english.people.com.cn/200611/11/eng20061111_320489.html   11 November 2006

China is to start construction of its largest dimethyl ether (DME) project with an annual output of three million tons to reduce rising oil consumption.
Coal-based DME is a clean-burning alternative to liquefied petroleum gas, liquid natural gas, diesel and gasoline.
Located in Ordos city of north China’s energy-rich Inner Mongolia Autonomous Region, the project will cost 21 billion yuan (2.6 billion U.S. dollars), the Shanghai Securities News reports.
Compared with the current annual output of 120,000 tons of DME each year, the project will make a huge difference to China’s alternative energy sector, said a statement from the National Development and Reform Commission (NDRC).
A pipeline will be built to transfer the DME from Ordos to the port city of Tangshan in north China’s Hebei Province. This would then enable it to be shipped to provinces in east and south China which are crying out for energy sources.
The participants in the project include power giants China National Coal Group Corporation, China Petroleum and Chemical Corporation and the Shanghai-based Shenergy Group.
Facing oil shortages, China is speeding up efforts to develop an oil substitution program to reduce its reliance on oil imports and offset the effects of rising oil prices.
But as a sustained coal supply has remained a challenge for China, NDRC has banned any coal-based DME project with a design capacity lower than one million tons.
Source: Xinhua  18 August 2006   http://english.people.com.cn/200608/18/eng20060818_294272.html

The Turpan-Hami Oilfield Co., a major oil and gas producer in northwest China’s Xinjiang Uygur Autonomous Region, made advances in both resource prospecting and oil and gas production last year.

Last year, the company verified 16.12 million tons of oil deposits and 5.18 billion cubic meters of natural gas reserves, of which 3.08 million tons and 3.04 billion cubic meters, respectively, are workable, company sources said.

According to the sources, last year the Turpan-Hami Oilfield increased its annual oil and gas production capacity by 200,000 tons and 270 million cubic meters, respectively.

In 2005, the company produced 2.09 million tons of crude oil, 1.53 billion cubic meters of natural gas, 186,000 tons of liquefied natural gas and 84,000 tons of methanol.

The company’s sales revenue totaled 7.62 billion yuan (939 million U.S. dollars)last year, the sources added.

According to China’s economic development strategy, Xinjiang will become an important energy supply base for the nation.

Source: Xinhua

Since the beginning of the new century, crude oil price has been increasing and broken the highest record many times. But the cost of production didn’t increase much, what’s the reason for the price hike?

During a forum held by the overseas edition of People’s Daily, experts have given their analysis about the situation.

Shen Jiru, a research fellow from the World Economic and Political Institute in Chinese Academy of Social Sciences (CASS) says oil supply is certain, but oil demand is increasing. Some accidents such as Hurricane Katrina and regional conflicts like Iraq war, or sanctions and embargo of oil to certain countries, all these can cause oil price hikes.

Peng Long, professor from International Business School of Beijing Foreign Studies University says oil has become a strategic resource in international relations and anti-terrorism struggle.

Zha Daojiong holds that oil is not renewable resources, since it is scarce, there is a gap between demand and supply, naturally, the price will be high.

What are the new characteristics of the world energy and how should we respond to it?

Jiang Ruiping, professor from the International economic department of Foreign Affairs University of China said the current world energy market is very vulnerable for the future of energy crisis. Thus, any accidents or incidents will cause fluctuation of the market. The accidents include political unrest in oil producing countries such as Nigeria, escalation of international political or military conflict such as Iraq war and Iranian nuke issue and natural disasters.

Zha Daojiong holds the new characteristics of energy issue is that the two large developing countries China and India become more and more dependent on oil while developed countries depend less as they have somewhat finished their industrialization.

Shen Jiru says energy issue is a global one. It concerns anti-terrorism, environment protection, science and technology and regional security. Thus, it needs all the countries to join hands to deal. More and closer cooperation among countries are needed.

Some people predict oil price has reached its peak, what is the new trend of the oil price?

Shen Jiru says it’s too optimistic to say the price peak has come. But some experts say when the oil price increases to 75 U.S. dollars per barrel, it will reach its peak because with world economic slowdown, the demand for oil will also slow down.

Peng Long says in the predictable future, the slowdown might be true, but the price decrease is unlikely.

Jiang Ruiping predicts that the oil price will be at a high level between 50 and 80 U.S. dollars per barrel for a long time.

What will be the emphasis of China’s energy strategy and diplomacy?

Zha Daojiong said it’s not strategic to think energy diplomacy is just to guarantee oneself to have sufficient supply. Although in recent years China was somewhat criticized for acquiring oil supply from the international market, China shouldn’t just passively deal with the criticism and pressure, but should take the process of getting international supply as a process to improve understanding among all the stakeholders.

Jiang Ruiping said the emphasis should be in establishing a strategic oil reserve system, participating in bilateral and multilateral cooperation in energy, expand investment in energy exploration and expand sources of oil supply and ensure the security of energy transportation.

Peng said China should strengthen its cooperation with oil exporters. And the cooperation shouldn’t be only in diplomacy, but also in political, economic and cultural fields.

By People’s Daily Online