CNPC hastens new energy development
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China National Petroleum Corp (CNPC), the country's largest oil and gas producer, will speed up development of new energies including coalbed methane, fuel ethanol and oil sands, aiming to set its annual oil-equivalent production capacity at 1.25 million tons this year.
The company will further increase capacity to 6 million tons of oil equivalent in 2015, Shanghai Securities News reported, citing an official with the company.
The company has just formulated its development plan for new energy this year, under which it will develop fuel ethanol capacity of 500,000 tons per year and coalbed methane capacity of 600 million cubic meters per year, said the report, citing Zhou Mingchun, chief financial officer of PetroChina Co, the listed arm of CNPC.
After increasing the capacity to 6 million tons, CNPC will have 4 billion cubic meters per year of coalbed methane capacity, 1 billion cubic meters per year of shale gas, 2 million tons per year of fuel ethanol and 60,000 tons per year of biodiesel, said Zhou.
At present, the company has started production on a 500,000-ton-per-year fuel ethanol plant in Jilin province, and is also developing coalbed methane in coal-rich Shanxi province.
Analysts said that the accelerated development pace in new energies by CNPC is in line with China's efforts to use more new energy for coal and oil alternatives. The high- potential new energy business will be another growth engine for CNPC's business.
"Development of new energies is an indispensable part of the company's goal to become an integrated energy company that can compete on a global scale," CNPC said in a statement on its website.
By now CNPC has invested over 1 billion yuan ($146 million) on fuel ethanol. The company has also formed a coalbed methane demonstration zone, which has reserves of around 100 billion cubic meters of gas, it said on the website.
On March 22 PetroChina said it had agreed on a joint bid with Shell to pay for A$3.5 billion ($3.15 billion) to acquire Arrow Energy Ltd, an Australian coal-seam gas developer.
The move will boost PetroChina's gas portfolio and also help speed up its initiatives for new energy, said analysts.
Coal-seam gas, commonly known as coalbed methane, is methane found in coal seams. It is produced by non-traditional means and but used in the same way as traditional natural gas.
China plans to increase its annual coal-bed methane output to 10 billion cubic meters in 2010.
China, which relies on imports for over half of its oil consumption, is expected to import 210 million tons of oil this year, as domestic production cannot keep pace with demand, Huang Li, an official with the National Energy Administration, said at the 10th China International Petroleum & Petrochemical Technology and Equipment Exhibition held in Beijing recently.
The country is expected to add 20 million tons of oil refining capacity this year, she said.
