93 replies to this topic

[marshall]

Sources of imported energy are interchangeable

I don't believe that it is important whether Canadian oil is being shipped to China or not.  For every gallon of Canadian oil that is shipped to the United States, the U.S. will buy one less gallon from Saudi Arabia.  Instead, that gallon from Saudi Arabia will be shipped to China.

On the other hand, let's assume that Canada eventually builds a pipeline to its West coast and ships oil to China.  For every gallon that Canada ships to China, the U.S. will simply buy an extra gallon from Saudi Arabia and China will buy one less.  The point is that it makes no difference whether Canada ships oil to China or not.

Furthermore, Canada is merely one player among many in the energy business.  As a consumer, China has the option of choosing the source of energy that it prefers.  For example, Australia exports 40 million tonnes of coal to China (see Ship Chartering: Australia plans to boost coal exports to China).  China can always import more Australian coal and convert it into oil in one of China's coal-to-liquid (i.e. CTL) plants.

From a strictly economic/business viewpoint this is correct.  However, from a strategic viewpoint the picture is fuzzy because supplies can be constrained whether there is an abundance of supplies or not.  Saudi Arabia is a client state of the U.S. while Venezuela is not even though it is geographically in the Western hemisphere.  China knows that in any conflict involving the U.S. that America will use its influence to stop or at least constrain the flow of oil into China.  So, it is definitely not as simple as you are making it sound.

This logic may work for a country like the U.S. or its allies under its protective military umbrella, but for everybody else, they need to secure their supplies either militarily, through exclusive supply contracts or both.  Do you really think China would leave their energy security at the whim of the U.S. by becoming overly reliant on distant oil suppliers who are either overtly or covertly American allies or client states?  Most countries follow this logic and is the reason why we hear so much talk of militarily securing supply routes.  Take the example of India.  It is clearly building up its navy to attain the capability to stop Chinese oil supplies in case India instigates a war with China.

I believe China must be factoring these variables into their calculations and including additional costs for extra military forces required for safeguarding the supply routes.  I would assume some calculation would be done to ensure minimal supplies could be guaranteed overland into China from Central Asia, Russia and Southeast Asia.  Any supplies above this threshold could be sourced from overseas where their supply disruption would not be crippling.

[Martian]

As usual, you raise very good points.  Remind me to give you a call when I need someone to pour cold water on one of my ideas.  I'm kidding of course (about the latter; not the former).

By the way, I'm moving right now and I don't have time to write articles.  In a couple of weeks, my upcoming posts will be entitled: "China knocks down free-trade dominoes," "China, Japan, South Korea gain on U.S. in patent race," "China's Next Step: Smart Grid," and "Security at Shanghai Expo is watertight."

[Martian]

Ethnic Chinese wins prestigious "2010 Presidential Green Chemistry Challenge Award from the U.S."

http://focustaiwan.tw/ShowNews/WebNews_Det...1&Type=aECO

"Taiwanese professor receives U.S. presidential chemistry award
2010/07/06 13:39:55


James C. Liao

Los Angeles, July 5 (CNA) Taiwan-native James C. Liao, a professor of chemical and biomolecular engineering at the University of California, Los Angeles (UCLA) , has been awarded a prestigious chemistry prize in the U.S. for synthesizing fuels from carbon dioxide.

The development, which won the 2010 Presidential Green Chemistry Challenge Award from the U.S. Environmental Protection Agency (EPA), has tremendous potential for cutting carbon emissions and saving fossil fuels, Liao said in an interview with the Central News Agency.

"The research is expected to enter mass production in five years at the soonest, " he said. "Once it enters mass production, it could replace 14 kinds of petroleum-based fuels and eliminate about 500 million tons of CO2 emissions."

Liao said scientists have only been able to indirectly convert CO2 into liquid fuels in the past, but his research has successfully developed a process that genetically modifies cyanobacterium to consume CO2 to produce the liquid fuel isobutanol.

Isobutanol is one of a number of higher alcohols considered to be superior to ethanol as fuels because of their higher energy density.

The technology is considered to have great promise, Liao said, because of the inexhaustible supply of CO2, unlike for oil or other alternative energy sources such as corn or rice straw.

"The problem now is how to effectively convert CO2 and find a more cost-efficient way to produce a variety of products," he said.

Liao graduated from National Taiwan University with a B.S. in chemical engineering in 1980, and got a Ph.D. from the University of Wisconsin in 1987. He joined the UCLA Henry Samueli School of Engineering and Applied Science in 1997.

The Presidential Green Chemistry Challenge Award, launched in 1995, promotes research on and the development of new technologies that help prevent pollution by reducing or eliminating hazardous waste in industrial production.

Liao, also affiliated with Easel Biotechnologies, LLC, which is commercializing the technology under exclusive licence from UCLA, is the first UCLA professor to receive the award in its 15-year history. (By Chiang Chin-yeh and Fanny Liu)"

[Martian]

“The Chinese are different with their big cash."  China's $2.4 trillion-dollar foreign-exchange reserves allow China to outgun any nation in a bidding war for overseas oil fields.

http://economictimes.indiatimes.com/market...how/6132572.cms

India way behind China in securing fuel supplies
6 Jul 2010, 0037 hrs IST,Bloomberg

NEW YORK/HONG KONG: Oil Minister Murli Deora travelled to Nigeria, Angola, Uganda, Sudan, Saudi Arabia and Venezuela this year, leading a record number of delegations to gain oil for the world’s third-fastest-growing major economy.

The flurry of visits is part of a new drive to find oil for India’s 1.2 billion people after losing out to China in at least $12.5 billion of contracts in the past year. India proposed a sovereign wealth fund to bid for reserves, told Oil & Natural Gas Corporation and Oil India to make a major acquisition each this year, and raised the amount they can spend without government approval to Rs 50 billion ($1.1 billion).

“There is a new push,” said NM Borah, chairman of Oil India. “Going abroad is part of the government’s policy — diplomatic support is very, very crucial as we search for assets overseas.” India’s energy use may more than double by 2030 to the equivalent of 833 million metric tonnes of oil from 2007, while China’s demand may rise 87% to 2.4 billion tonnes, the International Energy Agency said.

India faces an uneven contest to close the gap with China, which is dipping into $2.4 trillion of foreign currency reserves to buy stakes in oil and natural gas fields from Iraq to Uganda, compared with India’s $250 billion in foreign exchange reserves. State-run Chinese companies spent a record $32 billion last year acquiring energy and resources assets overseas versus India’s single $2.1 billion investment by ONGC.

China’s June 19 decision to allow the yuan to appreciate will strengthen the hand of Chinese companies buying overseas. India’s oil import bill climbed six-fold in the past decade to $85.47 billion for the year ended March, equivalent to about 7% of GDP.

“India’s search for energy has to become a more intense political game, rather than one based entirely on economics,” said Abheek Barua, an economist at HDFC Bank. “China has virtually already taken over Africa.” China has promised billions of dollars in aid, investment and loans to Africa, producer of one-eighth of the world’s crude oil, in exchange for energy supplies.

“We buy assets based on commercial decisions even though there is a mandate for securing energy for the country,” RS Sharma, chairman and MD of ONGC said in April. “The Chinese are different with their big cash. We can't invest just for the sake of it.”

China National Petroleum beat India by agreeing to pay $4.18 billion in August 2005 for PetroKazakhstan. A month later China National Petroleum again outbid ONGC in buying assets of EnCana in Ecuador for $1.42 billion.

A stronger yuan would also make purchases cheaper for the Chinese. The Peoples Bank of China said on June 19 it may allow the yuan to move higher, abandoning the 6.83 yuan peg to the dollar adopted during the global financial crisis to shield exporters. The yuan climbed 0.4 percent to 6.7976 per dollar in the first trading day after the announcement.

India has had some success. ONGC agreed in 2005 to spend as much as $6 billion on roads, ports, railway lines and power plants in Nigeria in exchange for 600,000 barrels a day of oil for 25 years. In April, Reliance Industries Ltd, operator of the countrys largest gas field, agreed to buy a $1.7 billion stake in natural-gas properties from Atlas Energy Inc. On June 24 it announced a $1.3 billion acquisition of shale gas assets in the US from Pioneer Natural Resources Co.

ONGC, Indian Oil and Oil India were part of a group in March that agreed to develop reserves in Venezuelas Carabobo blocks during a visit by Deora. In February, the minister persuaded Saudi Arabia, the worlds biggest oil exporter, to almost double crude shipments to India, to about 800,000 barrels a day, according to the ministry. State-run Saudi Aramco ships about 1 million barrels a day to China, more than to the US, chief executive officer Khalid al-Falih said January 28.

India increased the amount ONGC and some other state-run companies can spend to acquire assets and set up joint ventures, allowing them greater freedom to expand and become globally competitive, the government said in December.

PetroChina Co, which vies with Exxon Mobil Corp as the world’s biggest company by market value, wants half its oil to come from overseas by 2020, chairman Jiang Jiemin said in March. Less than a tenth comes from abroad now.

We will take advantage of opportunities in developing oil, gas and energy sources in all areas of the world, Jiang said in an interview in March.

Cnooc Ltd, the listed arm of Chinas biggest offshore oil producer, is in discussions to buy a one-third stake in three blocks in Ugandas Lake Albert region from Tullow Oil Plc ONGC had jointly bid with Indian Oil Corp and Oil India for the stake and lost out to the higher Chinese bid, a person familiar with the negotiations said, declining to be identified because the talks were private.

China has spent at least $21 billion on overseas resources in the past year, including state-controlled China Petrochemical Corp.s $4.65 billion purchase in April of a stake in an oil- sands project in Canada. ONGC was interested in the asset and didnt bid, a person familiar with ONGCs plans said, declining to be identified since the plans were not public.

ONGC plans to borrow $10 billion over the next decade for purchasing assets overseas. In September, China National Petroleum Corp., PetroChinas state-owned parent, received a $30 billion loan from China Development Bank at a discounted interest rate to buy energy resources, according to a September 9 statement from parent China National Petroleum Corp.

Tom Deegan, Hong Kong-based head of energy and infrastructal and finance through Chinese banks which have the liquidity, which perhaps Indian companies dont. Deegan has been advising on M&A deals in Asia for 13 years.

Adding India to the competition may push prices higher for hydrocarbon assets, boosting drilling costs that are already facing an increase in the US after an explosion in April at a BP Plc-leased drilling rig in the Gulf of Mexico released oil that polluted about 140 miles (225 kilometers) of coastline.

China Petrochemical, known as Sinopec Group, agreed to buy a 9 per cent stake in Syncrude Canada Ltd for $4.65 billion, or $650 million more than the high end of an estimate by Macquarie Securities.

Oil in New York has risen 0.3 per cent in the past year to $75.62 a barrel. Prices may average $84.50 a barrel in the fourth quarter of this year, according to the median estimate of 30 analysts surveyed by Bloomberg. Oil has tripled in the past 10 years."

[Martian]

China's Next Step: Smart Grid

Two of the major themes in this thread are advanced technology and energy efficiency.  A smart grid satisfies both criteria.



Unlike a 300,000-ton oil supertanker, a smart grid is hard to see.  Just like the nervous system for a human body, a smart grid enables a two-way communication between energy producers and consumers.  By providing information about energy demand throughout the day, variable pricing for electricity, and harnessing important elements of the smart grid as energy production and storage devices, there is less stress (or wear and tear) placed on the electricity grid and improvements of 10% to 15% in energy efficiency can be achieved.

Think of it this way.  The current electric grid is brainless.  Consumers are charged one uniform price for electricity.  This creates a problem for energy producers.  There are spikes in energy demand as consumers turn on their dishwashers, clothes washers, or dryers during the evening hours.  However, if you have a smart grid and the dishwasher's display panel tells you that electricity is a lot cheaper at 3 A.M. then you can program the dishwasher to wash the dishes at 3 A.M.  The consumer saves money and the electric company does not have to activate expensive natural gas generators to handle the spikes in electricity demand.  Everybody wins.

http://blogs.wsj.com/chinarealtime/2010/06...nas-smart-grid/

"* June 30, 2010, 6:48 PM HKT
State Grid Guns for China’s Smart Grid

State Grid Co. of China has thrown down the gauntlet in a move that could pose a major challenge to foreign companies seeking a foothold in the multibillion-dollar upgrades of China’s electricity network.


Government-run State Grid is setting China’s smart-grid standards as it gets into the smart-grid business itself. (ZUMApress.com)

The state-owned company, which controls the transmission of electricity over 26 of China’s 31 provinces and regions and was ranked 15th on Fortune’s Global 500 list in 2009, on Tuesday announced a set of standards it wants adopted by the government over “smart-grid” upgrades to China’s power transmission and distribution networks.

State Grid, interestingly, is setting the standards as it gets into the business of making smart-grid technologies. Wang Yimin, head of its smart-grid department, told the state-run China Daily bluntly that the company hopes to use its role to help keep its dominance in grid building and equipment supply.

State Grid was created in 2002 when the government reformed the electricity sector, separating power generation from transmission and creating a new electricity regulator in the bet that competition among power producers would increase efficiency and lower costs.

But State Grid has been criticized for using its quasi-monopoly status to muscle back in. Though one magazine ran into trouble for taking on State Grid, even the more typically docile China Daily acknowledged critics’ worries.

“Some experts have expressed concern that the aggressive power supplier is trying to monopolize China’s smart grid market,” the paper said. “A public and transparent standard will help break the industry monopoly by encouraging competition.”

State Grid’s moves are especially worrying for foreign companies such as General Electric Co., Siemens AG and others who see smart grid as a potentially huge and lucrative market. China is expected to spend $60 billion to $100 billion in the next decade on smart grid upgrades. Where Chinese suppliers of conventional power equipment can sell cheaply, foreign players think they have an edge on cutting-edge technology.

But if State Grid has its way, that edge could be dulled.

– Shai Oster"

[Martian]

Sick of coal, China boosts its nuclear goals by 50 percent


A Nuclear Power Plant in China - (Photo: Russianspy.org)

Sick of coal, China boosts its nuclear goals by 50 percent | VentureBeat

"Sick of coal, China boosts its nuclear goals by 50 percent
March 24, 2010 | Tom Slater

China is scaling up its nuclear power plans in a big way. Its goal is to build 70 gigawatts worth of nuclear capacity by 2020 — 50 percent higher than its 2020 target was five years ago. It looks like uranium, still unpopular in the U.S. is finding big fans in Asia.

Achieving this goal will cost the country as much as $59 billion for 28 more reactors — 20 of which are already in the process of being built. As of this year, China is home for one-third of the world’s nuclear power construction. And the industry looks pretty healthy. Nuclear is thriving in its relatively lax regulatory environment. In the U.S., projects can be bound up in red tape for years before inevitably being abandoned. In China, plants can be built in just four years, like clockwork.

But the country isn’t the largest nuclear generator in the world, it’s simply the fastest growing. In fact, nuclear only provides about 2 percent of the energy used in the country, compared to 19.7 percent in the U.S., and more than 75 percent in France.

China still consumes more coal than any nation on earth — but it knows that has to change. That’s one of the reasons it’s pushing so hard to build reactors — to limit reliance on dirty power while also expanding the energy supply to meet skyrocketing demand. After the United Nations climate talks in Copenhagen went bust, China said it would ramp up efforts to cut emissions. Nuclear could help it make good on its word.

The difficulties associated with wind and solar energy in China have also made nuclear look more appealing. Without a well-developed electrical grid, much less a Smart Grid with adequate storage, fully harnessing distributed sources of energy is somewhat of a fool’s errand. The country is still investing in solar and wind — developing a market presence in the U.S. in both areas, as well (think SunTech) — but not as much as in nuclear.

China’s latest nuclear strategy will be detailed in full later this year. As it stands, the country is building more than twice as much new power as its closest competitor, Russia. In addition to delivering the power generated to its own people, China hopes to export it to its neighbors, including India, South Korea, and Russia — each of which are building more reactors than any other three countries outside of China. By selling nuclear energy abroad, Chinese companies will be competing directly with France’s Areva and General Electric.

Around the world, 370 gigawatts-worth of nuclear facilities are in operation. Another 200 gigawatts are currently under construction."

[Martian]

Huge solar-powered station starts operation


China's Suntech BIPV.  Suntech Power Holdings Co. is the world's largest maker of polysilicon solar-power modules.

Huge solar station starts operation - China.org.cn

"Huge solar station starts operation
China Daily, July 19, 2010

The world's largest stand alone integrated photovoltaic (BIPV) project started transmitting power to the grid in Shanghai on Sunday in another move showcasing China's commitment to reduced carbon emissions.

The 6.68-megawatt solar system can produce 6.3 million kilowatt-hours (kwh) of electricity per year to meet the needs of 12,000 Shanghai households. It will cut coal consumption by 2,254 tons, while reducing carbon emissions by 6,600 tons.

The project has been installed on the awnings on both sides of the newly completed Hongqiao Station of the Beijing-Shanghai High-Speed Railway. Its 20,000 solar panels cover a roof area of 61,000 sq m and have produced 300,000 kwh power since the 160 million-yuan project began operation two weeks ago.

"The project is another manifestation of China's commitment to reducing carbon emissions to fight climate change. It comes after the country set a voluntary target of cutting carbon intensity per unit of GDP by 40 to 45 percent by 2020," said Yu Hailong, general manager of the Beijing-based China Energy Conservation and Environmental Protection Group (CECEP), the project's developer.

"As a pilot project, it will help stimulate the development of solar energy in China and promote the construction of more environmentally friendly railway stations," he said.

Chief engineer of the Ministry of Railway Zheng Jian said China will further encourage BIPV implementation at railway stations, which serve as an ideal vehicle to promote the technology.

A 2.2-MV BIPV system has also been installed at the Wuhan Station of the Wuhan-Guangzhou High-speed Railway. The system was connected to the national grid in May, CECEP deputy manager Chen Shuguang said.

"BIPV technology does not take up extra space, because it is integrated into buildings' design and construction. It is especially suitable for China's eastern areas, where there are limited land resources yet greater energy demand," Chen said.

The development of renewable energy has been topping the central government's agenda. It aims to have an installed capacity of 20 gigawatts of solar units and 100 gigawatts of wind power by 2020, official statistics show.

A number of world-class pilot projects have been completed this year in Shanghai, which is hosting the World Expo 2010.

They include the 4.6-MV solar energy generation system installed in the Expo Garden and China's first offshore wind farm, the 102-MV Donghai Bridge wind power project, which started transmitting electricity to the national grid in early July.

The government is also tendering for bids to develop 13 solar power projects with a combined capacity of 280 megawatts in the western regions, following last year's bidding for a 10-megawatt solar power plant in Gansu province's Dunhuang.

But Song Aizhen, of the solar energy branch of CECEP, said the government needs to come up with more detailed subsidy plans for renewable energies to encourage more active corporate investment.

"Take solar energy for instance - its cost is already three times that of thermal power, and BIPV technologies are even more expensive," she said.

'So government subsidies will be crucial to the technology's wider application.'"

[Martian]

China starts up first fourth-generation nuclear reactor


China Experimental Fast Reactor


CEFR interior (Photo credit: China Institute of Atomic Energy)

China starts up first fourth generation nuclear reactor

"China starts up first fourth generation nuclear reactor
English.news.cn   2010-07-22 07:22:44

BEIJING, July 21 (Xinhua) -- Chinese scientists have succeeded in testing the country's first experimental fourth generation nuclear reactor, an expert said here on Wednesday.

The successful start up of the China Experimental Fast Reactor (CEFR) marked a breakthrough in China's fourth generation nuclear technology, and made China the eighth country in the world to own the technology, Zhang Donghui, general manager of the CEFR project, told Xinhua over phone.

China's existing 11 nuclear power generating units all use second generation of nuclear power generation technology. The country started the construction of its first third-generation pressurized water reactors using AP1000 technologies developed by U.S.-based Westinghouse in 2009.

Compared with the third generation reactors which have an utility rate of uranium of just one percent, CEFR boasts an utility rate of more than 60 percent.

A new recycling technology called pyroprocessing is also used to close the fuel cycle by separating the unused fuel from most of the radioactive waste.

"The CEFR is safer, more environment-friendly, and more economic than its predecessors," Zhang said."

China Close to Firing Up a Fast Reactor « Carbon-Nation

"The Chinese Experimental Fast Reactor is so-named because the neutrons produced in its core are not ‘moderated’ with water like those that generate heat in nearly all commercial nuclear reactors. The faster neutrons can burn down nuclear waste and even generate new fuel, promising a solution to the thorny problem of waste storage as well as energy independence.

Fast reactors have proven difficult to operate because most rely on highly flammable liquid sodium to cool the reactor, but their promised benefits keep the hope alive."

China's Fast Breeder Reactor (FBR) Program

"China's Fast Breeder Reactor (FBR) Program

原子能快堆研究中心

China began research on fast neutron breeder reactors in the mid- and late-1960s. During its basic research period from 1965 to 1987, China's research focused on fast reactor technology such as fast reactor physics, thermodynamics, sodium technology and small sodium facility. During this initial period about 12 experimental setups were established, and one sodium loop was constructed. This included a 50 kg 235U zero-power neutron setup. On June 28 June 1970, this device reached criticality.  The engineering goal for the applied basic research phase of China's FBR program (1987-1993)  was to successfully construct a 65 MWt (25 MWe) experimental fast reactor.  Further developments were made in sodium technology, fuel and materials, fast reactor safety, and reactor design. A preliminary foundation for a fast reactor design was established, and approximately 20 experimental setups and sodium loops were built."

http://www.neimagazine.com/story.asp?sc=2055118

"Nine years after construction began on the China Experimental Fast Reactor near Beijing, the reactor is close to start up. First criticality is expected before the end of 2009 and the reactor is due to be connected to the grid in June of 2010.
...
Ordering of components for CEFR began in 1997. The components were imported mainly from Russia, France, USA and UK, with imports from abroad sharing about 30% of the total systems and components budget."

http://analysis.nuclearenergyinsider.com/i...r-ready-connect

"Following the start of operations for CEFR in June, the next milestone will be the commissioning of the so-called China Demonstration Fast Reactor (CDFR), planned for 2018, though initial work on the design was approved back in 2007.

The CDFR will be located in Fujian province on China’s busy and economically active eastern seaboard, opposite Taiwan.

Following CDFR, the plan is move towards a Chinese developed commercial fast reactor (CCFR), though no preliminary dates have been released for this final stage of the programme as yet – dates including 2028 and 2035 have been [mooted] but not confirmed.

Despite this, the press has reported (unconfirmed by the central government in Beijing but suggested by sources at the government-linked China Institute of Atomic Energy) that several CDFR plants should be in operation by 2030 and that China’s nuclear capacity will rise to 240-250GWe by 2050 with most of this produced by fast breeder reactors that will be introduced to replace China’s current stock of highly polluting, inefficient and costly coal fired power plants.

New record for nuclear, for China

If China does deliver the CEFR in June then it will be the only third power-generating fast reactor in operation globally."

[marchpole]

China develops 5-trillion-yuan alternative energy plan
15:20, July 22, 2010    

http://english.peopledaily.com.cn/90001/90...62/7076933.html

To promote the development of the emerging energy industries and meet the carbon emissions reduction targets of 2020, the National Energy Administration (NEA) has compiled a development plan for emerging energy industries from 2011 to 2020 that will require direct investments totaling 5 trillion yuan($738 bln), according to the NEA on July 20.

Jiang Bing, director-general of the Policy Planning Department under the NEA, said that the plan has specified major policy measures for the development and utilization of nuclear, wind, solar, biomass, geothermal, unconventional natural gas and other new energies. The plan has also detailed the industrialized application of new clean coal, smart grid, distributed energy and alternative-fuel vehicle technologies.

According to initial calculations, the new plan will greatly ease China's excessive reliance on coal in 2020 and cut sulfur dioxide emissions by about 7.8 million tons and carbon dioxide emissions by about 1.2 billion tons in a year. Furthermore, this will contribute 1.5 trillion yuan in added-value per year and create 15 million job opportunities.

The key energy structural adjustment tasks during the 12th Five-Year Plan period include taking effective measures to increase energy efficiency, enhancing the utilization levels of traditional clean energy and expanding the utilization scales of natural gas and other clean energies. It also includes accelerating the construction of hydropower and nuclear power facilities.

The plan will support advances in renewable energy sources such as the conversion and utilization of wind, solar and biomass energy. It also includes comprehensively planning for the construction of major energy bases and cross-region energy transmission channels in order to optimize energy resource allocation.

The NEA estimated that China will consume 260 billion cubic meters of natural gas in 2015 and the proportion of gas in the country's total energy consumption will rise from the current figure of nearly 4 percent to over 8 percent. In addition, 250 million kilowatts of hydroelectricity and 39 million kilowatts of nuclear power will also be consumed in the same year, and their joint share in total primary energy consumption will rise from the current figure of around 7 percent to nearly 9 percent.

In addition, the joint share of wind-generated electricity, solar power, and biomass energy will rise from the current figure of nearly 1 percent to nearly 3 percent. The consumption of renewable energy, excluding hydro energy, will increase by nearly 2 percent with the figure standing at 110 million tons of standard coal, and the share of non-fossil energy in total primary energy consumption may reach 11 percent.

[marchpole]

China Surges Past U.S., Europe in Clean-Energy Asset Financing
July 13, 2010, 10:25 PM EDT

http://www.businessweek.com/news/2010-07-1...-financing.html

July 13 (Bloomberg) -- China attracted more asset financing in clean-energy technology in the second quarter than Europe and the U.S. combined, Bloomberg New Energy Finance said.

Financing of wind turbines, solar panels and low-carbon technology in China climbed 72 percent to $11.5 billion compared with the year-earlier quarter, Bloomberg New Energy Finance said in an e-mailed statement. U.S. investments in clean energy rose to $4.9 billion while in Europe it fell to $4.5 billion.

“China continues its extraordinary surge and Europe has suffered a setback according to our figures for asset finance in the second quarter,” said Michael Liebreich, chief executive of New Energy Finance. “Where investors are placing their bets is changing rapidly.”

China’s $586 billion stimulus program, implemented last year and still being spent, and economic growth boosted industrial output and energy demand. The world’s most populous nation installed 14 gigawatts of new wind power last year, more than any other country.

Asset financing typically accounts for just under two- thirds of all new funds invested in clean energy in a given year. In the first half, it reached $58.4 billion, a 21 percent gain over the same period a year earlier.

Total new investment in clean energy worldwide, including share sales, venture capital, private equity and asset finance, slipped 3 percent to $33.9 billion in the second quarter from the same period last year.

[marchpole]

China's nuclear power plants and plans:

http://af.reuters.com/article/energyOilNew...E66J07820100720


BEIJING July 20 (Reuters) - China will this month start
building a nuclear plant in the southern region of Guangxi,
planning to start up the first reactor in 2015 and a second in
2016, the China Daily newspaper reported on Tuesday.

China has 11 working reactors with 9.07 gigawatts of total
capacity. A twelfth, which will eventually have a capacity of
1.08 GW, began generating power this month from a new unit that
should be operational in October.

China has said it wants to raise its capacity to 40 GW by
2020, over 5 percent of its total installed capacity, or enough
to power Spain. Officials said China is considering raising the
already ambitious goal to 70 GW or more by 2020.

The following lists China's nuclear power plants already
operating, under construction, approved by the government or
planned. Capacity is in megawatts.

Plant (province)             Capacity    Start-up     Technology supplier
----------------------------------------------------------------
IN USE                                                        
----------------------------------------------------------------
Qinshan phase I (Zhejiang)   300         1991         indigenous
Qinshan phase II (Zhejiang)  650X2       2002/04    AECL, Canada
Daya Bay (Guangdong)         984X2       1994  Framatome, France
Ling Ao phase I (Guangdong)  990x2       2003          Framatome
Qinshan phase III (Zhejiang) 700X2       2003               AECL
Tianwan plant I (Jiangsu)    1,060       2006     Rostam, Russia
Tianwan Plant II (Jiangsu)   1,060       2007     Rostam, Russia
----------------------------------------------------------------
TOTAL                        9,068                            
----------------------------------------------------------------
UNDER CONSTRUCTION                                            
----------------------------------------------------------------
Qinshan phase II (Zhejiang)    650x2     2011               AECL
Ling Ao phase II (Guangdong) 1,080x2     2010/11       Framatome
Hongyanhe (Liaoning)         1,000X4     2012/14      indigenous
Ningde (Fujian)              1,000X4     2012/15      indigenous
Fuqing (Fujian)              1,000x6     2013-        indigenous
Yangjiang (Guangdong)        1,000x6     2013/17      indigenous
Qinshan/Fangjiashan (Zhejiang) 1,000x2   2013/14      indigenous
Haiyang (Shandong)           1,000X2     2013       Westinghouse
Sanmen (Zhejiang)            1,000X2     2013       Westinghouse
Taishan (Guangdong)          1,600x2     2013              Areva
Changjiang (Hainan)            650x2     2014/15      indigenous
Fangcheng(Guangxi)           1,000x6     2015/2016            NA
----------------------------------------------------------------
APPROVED                                                      
----------------------------------------------------------------
Rongcheng (Shandong)             200     NA           indigenous
----------------------------------------------------------------
PLANNED                                                        
----------------------------------------------------------------
Wuhu (Anhui)                 1,000x4     NA                   NA
Xianning (Hubei)                  NA     NA         Westinghouse
Taohuajiang (Hunan)               NA     NA         Westinghouse
Pengze (Jiangxi)                  NA     NA         Westinghouse
----------------------------------------------------------------

[macau boy]

It is good to see that half of those under construction and planned are domestic designed reactor units.

[Martian]

Wind blows in energy for Shanghai


China's offshore wind turbines

Wind blows in energy for Shanghai

"Wind blows in energy for Shanghai
English.news.cn   2010-07-07 09:00:21

BEIJING, July 7 (Xinhuanet) -- China's biggest offshore wind farm started transmitting power to the national grid yesterday morning through a submarine cable, authorities said.

The Donghai Bridge Wind Farm off Shanghai's coast, consisting of 34 three-megawatt wind-driven generators, can fuel more than 200,000 city households.

The capacity of the wind farm was only 102 megawatts, less than 1 percent of the city's current total power capacity of about 18,200 megawatts from traditional fuel electric plants.

But Shanghai Electric Power Co Ltd, the city's power supplier, said it was a good start for the application of clean energy in Shanghai.

"The operation of the Donghai Bridge Wind Farm provided good experience for the development of new energy," said Li Chonghe, vice general manager.

The company said that with the operation of the Donghai wind farm, the city could save about 86,000 tons of coal and reduce carbon dioxide by more than 234,700 tons every year.

Construction of the wind farm, located at the east side of the Donghai Bridge, was started in September 2008 and finished this February. Before operations officially started, the wind farm was on a trial run for more than a month, the company said.

The first batch of power generated by the wind farm is being transmitted to the World Expo site.

Meanwhile, construction of the Donghai wind farm's second phase has been approved for the west side of the bridge, authorities said. The total capacity of the second phase was also designed at about 100 megawatts, the company said.

The company said it plans to build another four offshore wind farms: one in the Pudong New Area, one in Chongming County and the other two in Fengxian District. The total capacity of wind power could reach 1,100 megawatts after the farms are finished.

The city's power capacity now amounts to 26,640 megawatts after including 8,440 megawatts brought in by the national grid from other provinces. Power demand is expected to peak at 26,000 megawatts during workday rush hours on extremely hot days this summer, officials said.

(Source: Shanghaidaily.com)"

[Martian]

Sinopec Fujian Integrated Refining & Ethylene Joint Venture Project


Sinopec Fujian Integrated Refining & Ethylene Joint Venture Project in QUANZHOU, FUJIAN PROVINCE, China




Sinopec Quanzhou facility to mainly process Saudi Arabian crude. [China Daily]

China's Sinopec reports 16.74% rise in refining in H1

"China's Sinopec reports 16.74% rise in refining in H1
English.news.cn   2010-07-20 19:49:44

BEIJING, July 20 (Xinhua) -- China Petroleum and Chemical Corp. (Sinopec), the nation's largest oil refiner, said Tuesday that it processed 101.45 million tonnes of crude oil in the first half of 2010, up 16.74 percent year on year due to strong growth of the Chinese economy.

The company, also a leading oil producer, said in a preliminary report that its natural gas output rose strongly by 40.73 percent from the same period last year to 200.56 billion cubic meters despite crude oil output only rising 0.05 percent to 149.19 million barrels.

Sinopec saw diesel output rise by 13.33 percent to 36.72 million tonnes in the first half from a year earlier, while kerosene was up 29.96 percent, the company said.

Strong domestic economic growth in the first half had contributed to the increases in its rising output.

China's gross domestic product (GDP) grew 11.1 percent year on year in the first half, according to the National Bureau of Statistics.

Gasoline output rose by 4.59 percent year on year in the first half,said the company.

Ethylene went up by 41.34 percent, synthetic resins by 28.51 percent, synthetic fibers by 7.47 percent and synthetic rubbers by 18.58 percent.

Domestic sales of refined oil products rose sharply by 18.09 percent year on year to 68.15 million tonnes in the first half.

Sinopec reported its net profit in the first quarter rose 39.93 percent year on year to 15.785 billion yuan (about 2.3 billion U.S. dollars).

Listed in Hong Kong, New York, London and Shanghai, Sinopec is the listed subsidiary of China Petrochemical Corporation (Sinopec Group).

The company share price in the mainland A-share market gained 3.58 percent to 8.38 yuan on Tuesday and climbed 0.832 percent in the Hong Kong market to 6.06 Hong Kong dollars."

[Martian]

China uses seawater desalination technology at nuke project

It is becoming standard practice in China to add a desalination function to new nuclear power plants, such as the "Hongyanhe nuclear power plant near Dalian City in the Liaoning Province of China."


"Artist’s rendition of Hongyanhe nuclear power station in China."


"Located in city Wafangdian on the Liaodong Peninsula, the northeast's first nuclear power plant, named Liaoning Hongyanhe Nuclear Power Plant, is swiftly on the way and in five years, the green nuclear power will be supplied to thousands of households in Dalian when the first phase of the project is completed in 2012."

China uses seawater desalination technology at nuke project

"China uses seawater desalination technology at nuke project
English.news.cn   2010-06-17 15:49:14

BEIJING, June 17 (Xinhua) -- Seawater desalination technology is being used at the Hongyanhe nuclear power station under construction in Wafangdian City in northeast China's Liaoning Province.

Desalinated seawater has for years been used at foreign nuclear projects abroad but it is the first time the technology has been used at a major nuclear power project in China.

The seawater desalination facility at Hongyanhe station is able to provide 10,080 tonnes of freshwater for the project.

The Hongyanhe nuclear plant has four generating units with an annual capacity of one million kilowatts each.

Construction started on the first-phase of the 50 billion yuan (7.3 billion U.S. dollars) Hongyanhe nuclear project in August 2007.

In May 2010, the central government approved the second phase of the project, which involves another two 1-million-kw generating units. Upon completion of the whole station, the six units will generate 45 billion kilowatt-hours of electricity annually."

[Martian]

China's South-North Water Transfer Project

In addition to desalination plants, China's government is in the process of transferring "eight trillion gallons of water a year pumped through two 800-mile-long channels" from water-abundant south China to water-scarce north China.


Dam of the Danjiangkou Reservoir in central China's Hubei Province.

Life of Guangzhou - 330,000 Residents to Move for Water Diversion Project in C. China

"China's south-to-north water diversion project is designed to divert water from the water-rich south of the country, mainly the Yangtze, or the country's longest river, up to the dry north.
...
The huge water diversion project consists of eastern, central and western routes.

The central route of the project requires construction of an open-cut canal through which water will be drawn from Danjiangkou Reservoir on Hanjiang River, the largest tributary of the Yangtze, before being moved to Beijing and Tianjin."


China's South-North Water Transfer Project

Technical information on China's South-North Water Transfer Project:

"Arguably the biggest infrastructure project in history, the South-North Water Diversion Project (or the South-to-North Water Transfer Project) is a US$62 billion attempt to divert water from the Yangtze River in the south to the dry rivers of the north, which is currently facing water shortages.

The plan will see eight trillion gallons of water a year pumped through two 800-mile-long channels in order to relieve water shortages in the north of the country. Even this may not be enough though, and the Chinese government is considering a third tunnel."

[macau boy]

I read somewhere that the dam at Danjiangkou was raised eleven meters from its original height. I have no idea how they did it.

[Martian]

Chinese, Turkmen, Kazakh, Uzbek presidents unveil gas pipeline


"Chinese President Hu Jintao, Turkmen President Gurbanguly Berdymukhamedov, Kazakh President Nursultan Nazarbayev and Uzbek President Islam Karimov turn on the flow of natural gas together at the gas plant on the right bank of the Amu Darya River, Turkmenistan, on Dec 14, 2009. The four leaders attended the inauguration ceremony of the China-Central Asia natural gas pipeline here on Dec 14. [Xinhua]"


"Workers at the opening ceremony of a gas pipeline in Samandepe, Turkmenistan"

Welcome to SCO Website....

"Chinese, Turkmen, Kazakh, Uzbek presidents unveil gas pipeline
2009-12-14

TURKMENABAD, Dec. 14 (Xinhua) -- Chinese President Hu Jintao and his counterparts from Turkmenistan, Kazakhstan and Uzbekistan Monday jointly put into operation a natural gas pipeline linking the four nations.

At the ceremony in a gas plant near the Turkmen-Uzbek border, President Hu said the China-Central Asia natural gas pipeline is a model of sincere solidarity and mutually beneficial cooperation of the four countries. He said the gas pipeline is a carrier of goodwill for friendship and mutual benefits of the four countries.

With their hands on wheel of valves, President Hu and Turkmen President Gurbanguly Berdymukhamedov, Kazakh President Nursultan Nazarbayev and Uzbek President Islam Karimov turned on the flow of natural gas together in the gas plant on the right bank of the AmuDarya River.

The 1,833-kilometer gas pipeline starts at the gas plant near this border town in Turkmenistan and runs through central Uzbekistan and southern Kazakhstan before entering China at the border pass of Horgos in the northwest region of Xinjiang.

One of the two parallel pipelines which make up the project has already come on stream and the other line is expected to be operational next year.

The pipeline connects with pipelines inside China that carry natural gas produced in Turkmenistan to major Chinese cities like Shanghai, Guangzhou and Hong Kong.

President Hu said at the inauguration ceremony that the China-Central Asia natural gas pipeline is a major cooperative project and of great significance to the four countries.

He said China is ready to continue to maintain close communication and step up coordination with Turkmenistan, Kazakhstan and Uzbekistan to build the second line of the project and secure safety and efficiency in the pipeline's operation. He said China is ready to advance energy collaboration among the four countries in an all-round way and to establish a long-term, stable, secured and reliable partnership of energy cooperation.

Hu said the plan and construction of the gas pipeline has won consistent attention and support of the presidents of the three Central Asian countries. The governments of these countries have done a great deal to lay a solid foundation for the smooth progress of pipeline construction. Hu said the pipeline is also a result of hard work by engineers from the four countries who have set a high standard of safety, efficiency and quality in construction.

Hu said the four countries have their own specific advantages in energy industry and share conformity in the policy goals of developing energy industry.

He said in recent years, the four countries have actively carried out energy cooperation and achieved fruitful results in line with the principle of mutual complementarity, mutual benefit, equality and win-win cooperation.

President Hu traveled some 80 kilometers by car from the Turkmenabat Airport to the border town. He and other leaders were given warm welcome by the local people.

At the ceremony, the leaders spoke highly of the pipeline, saying the China-Central Asia gas pipeline will bring benefits to the whole region.

Hu said at present the international situation is undergoing profound and complicated changes. He called for the four countries to strengthen cooperation and work to promote common development of all countries in the region.

He said the China-Central Asia gas pipeline provided yet another important platform for regional cooperation. He called for the countries to apply the experience and model of this project to other fields of cooperation among the four countries so as to enhance regional economic cooperation in an extensive way and lay a solid foundation for institutionalizing and scaling up regional cooperation.

Hu said China and Turkmenistan, Uzbekistan and Kazakhstan are good neighbors whose people share long-standing friendship. In recent years, the sustained, healthy and steady growth of relations among the four nations has brought about substantial benefits to economic growth, social stability and improvement of international status of the four countries.

Hu said China places great importance on developing friendly cooperation with Turkmenistan, Uzbekistan and Kazakhstan. He expressed the wish that the four nations be good neighbors, friends and partners forever.

Chinese officials said that the pipeline will serve the long-term interests of China and Central Asian nations, and will promote social and economic development of the countries in the region.

Turkmenistan's state media said that transporting gas supplies to China is important for the implementation of the country's strategy to diversify energy export routes to world markets.

Turkmen President Berdymukhamedov said in an earlier interview with Chinese media that the gas pipeline is an embodiment of true partnership based on equality, mutual complementarity and full recognition and utilization of cooperative potentials. He said the completion of the pipeline opened up a greater prospect of bilateral cooperation.

"The project has truly realized the balance of interests among energy exporters, transporters and consumers," he told reporters.

Deimdet Sh. Shayakhmetov, general director of Asia Gas Pipeline LLP of Kazakhstan, said in an interview that construction of the gas pipeline has created a large number of job opportunities and prompted growth of relevant industries in Kazakhstan.

He said after the gas pipeline went into operation, Kazakhstan would reap in a handsome income from transport fees. The sub-line of the pipeline will supply much needed natural gas to southern part of Kazakhstan, Shayakhmetov said.

Shayakhmetov said the gas pipeline has opened up a new outlet of energy export for both Turkmenistan and Uzbekistan and will bring about a great deal of income from transport fees to the latter.

"In fact, the most significant point of the China-Central Asia gas pipeline lies in that we and our neighbors find more common interests and cooperative opportunities," Shayakhmetov said.

Chinese officials said the pipeline will help improve the energy structure of China."

[marchpole]

Turkmens seek $4.1 Bln loan from China
By ALEXANDER VERSHININ (AP) – 6 hours ago

http://www.google.com/hostednews/ap/articl...V5FfHAD9HIO7PG0

ASHGABAT, Turkmenistan — Energy-rich Turkmenistan is reaching out to China for a $4.1 billion loan to develop one of the world's largest natural gas fields, state media reported Friday.

While signaling its growing reliance on economic support from China, the isolated Central Asian nation has also expressed a readiness to award concessions for oil and gas fields in the Caspian Sea to a range of U.S. companies.

"For the further financing of the project to develop the South Yolotan gas field, it is necessary to conduct intensive negotiations with China State Development Bank on extending a soft loan worth $4.1 billion," President Gurbanguli Berdymukhamedov was quoted as telling a meeting of energy industry representatives at a meeting Thursday.

China already loaned Turkmenistan $3 billion last year for the development of the South Yolotan field near the Afghan border, which an independent British surveying company has said may be one of the five largest gas reserves in the world.

A landmark 1,800-kilometer (1,080-mile) pipeline leading from Turkmenistan, through Uzbekistan and Kazakhstan, to China began pumping natural gas in December, a coup for Beijing in its search for new sources of energy to fuel its burgeoning economy.

Turkmen gas deliveries to China through the pipeline are expected to hit around 6 billion cubic meters this year, with supplies increasing incrementally every year until they reach 40 billion cubic meters in 2015. That increase will rely in part on the success of effectively exploiting resources at South Yolotan.

Russia, which is buying around 10 billion cubic meters of gas from Turkmenistan this year, has long hoped to corner supplies from the fellow former Soviet republic. Western nations have also jealously eyed Central Asia's gas riches and backed pipeline routes that would enable those energy resources to reach Europe.

China's deep pockets and active energy diplomacy have allowed it to steal a march on its would-be rivals, however, and enabled it to claim the biggest prize Turkmenistan has on offer.

Turkmenistan's apparent need for financial assistance will raise eyebrows as the government spends billions on a lavish tourist complex on its Caspian coast, which some critics have described as a frivolous white elephant.

At Thursday's meeting, Berdymukhamedov instructed officials to consider proposals to develop offshore oil and gas fields in the Caspian Sea submitted by Chevron and ConocoPhillips. Among the other potential candidates he named were TX Oil Ltd., an obscure Texas-based company chaired by Neil Mallon Bush, former President George W. Bush's younger brother, and Abu Dhabi-based Mubadala Oil and Gas.

No details were given about the size of the offshore fields in question or the required amount for investment.

Berdymukhamedov also gave a year-end deadline for the government to conclude a sale agreement for gas to be sold through the planned Turkmenistan-Afghanistan-Pakistan-India pipeline.

Negotiations on building the trans-Afghan pipeline have lasted more than 15 years, although persistent conflict in the region has weakened the energy route's prospects.

The Asian Development Bank financed a feasibility study project in 2005 that envisioned the pipeline spanning 1,680 kilometers (1,008 miles) from Turkmenistan's Dauletabad field to the Indian border village of Fazilka. The cost of construction has been estimated at $3.3 billion with annual supply capacity slated to reach 33 billion cubic meters of gas.

[Martian]

China to Import More Russian Coal, Lend $6 Billion - Bloomberg

"China to Import More Russian Coal, Lend $6 Billion
By Bloomberg News - Sep 7, 2010 5:09 AM ET


China became a net coal importer for the first time in 2009 after overseas deliveries more than tripled to a record 125.8 million tons from a year earlier. Photographer: Qilai Shen/Bloomberg

China, the world’s biggest coal consumer, agreed to increase imports of the commodity from Russia by two-thirds in return for a $6 billion loan.

Russia will raise shipments to China to at least 15 million metric tons annually in the next five years and more than 20 million tons in the following 20 years, according to a Russian Energy Ministry statement. Deliveries surged 15-fold to 11.8 million tons last year, accounting for about 10 percent of China’s total imports.

Russia will use the loan to finance investments by domestic coal producers in return for a guarantee to increase supplies to China, Russian Energy Ministry spokeswoman Irina Yesipova said today by telephone. China, which uses coal to make steel and to fuel 80 percent of its power plants, is seeking to boost imports from countries including Mongolia and Australia to meet demand.

“It is strategically important for China to boost coal imports from neighboring counties including Russia to secure energy supply,” Wu Jie, a coal analyst at Orient Securities Ltd., said by telephone from Shanghai. “The purchase won’t have too big an impact on the domestic market and prices, given the moderate increase.”

Russia Vs. Australia

China became a net coal importer for the first time in 2009 after overseas deliveries more than tripled to a record 125.8 million tons from a year earlier. Its coal purchases from Russia cost an average of $87 a ton last year, compared with $111 a ton for cargoes from Australia, according to customs data. Russia was the fourth-largest supplier after Australia, Indonesia and Vietnam, the data show.

Russia and China signed the coal-supply and loan agreements at the end of August, according to the Russian statement. The $6 billion loan will help Russia fund new mining equipment, develop resources in the nation’s Far East and build coal-transportation links including railways, the China Coal Transportation and Distribution Association said today in a report on its website.

The countries will also set up joint ventures to develop coal resources in Russia and conduct research into coal-to- liquids technology, according to the Chinese report. Russia will cooperate on exploration with Shenhua Group Corp., China’s largest coal company, the association said, without elaborating.

Drive the Industry

“This agreement is beneficial for all coal producers in Russia,” said Alexander Pukhaev, an analyst at VTB Capital in Moscow. “It could act as a key factor driving forward the development of this sector.”

OAO Mechel, Russia’s biggest producer of coal for steelmaking, may benefit from the Chinese loan because it needs funds for its Elga mining project in eastern Siberia, Pukhaev said. Steelmakers OAO Severstal, Evraz Group SA and OAO Novolipetsk Steel might also be interested as they seek to develop coking-coal deposits in Siberia’s Tyva region, he said.

OAO Siberian Coal Energy Co., Russia’s largest coal producer, said last September that it increased exports to China 10-fold in the first nine months of 2009.

Electricity demand in China grew 22 percent in the first half from a year earlier as economic growth rebounded to 10.3 percent in the second quarter and 11.9 percent in the first.

--Winnie Zhu in Shanghai. With assistance from Henry Meyer in Moscow, and Wang Ying and Baizhen Chua in Beijing. Editors: Amanda Jordan, Alastair Reed

To contact the reporter on this story: Winnie Zhu in Shanghai at wzhu4@bloomberg.net"

[Martian]

Chinese Offshore Development Blows Past U.S.

There is more good news from the New York Times.  The most important fact from the article is that China co-designs, builds, and retains the intellectual property right to its wind turbines and related technologies.  "All of China's top five turbine manufacturers have worked with foreign engineers yet retained the intellectual property rights on the technologies."


image via CleanTechnica

http://www.nytimes.com/cwire/2010/09/07/07...t-us-47150.html

"Chinese Offshore Development Blows Past U.S.
By MANUELA ZONINSEIN of ClimateWire
Published: September 7, 2010

As proposed American offshore wind-farm projects creep forward -- slowed by state legislative debates, due diligence and environmental impact assessments -- China has leapt past the United States, installing its first offshore wind farm.

Several other farms also are already under construction, and even the Chinese government's ambitious targets seem low compared to industry dreaming.

"What the U.S. doesn't realize," said Peggy Liu, founder and chairwoman of the Joint U.S.-China Collaboration on Clean Energy, is that China "is going from manufacturing hub to the clean-tech laboratory of the world."

The first major offshore wind farm outside of Europe is located in the East China Sea, near Shanghai. The 102-megawatt Donghai Bridge Wind Farm began transmitting power to the national grid in July and signals a new direction for Chinese renewable energy projects and the initiation of a national policy focusing not just on wind power, but increasingly on the offshore variety.

Moreover, "it serves as a showcase of what the Chinese can do offshore ... and it's quite significant," said Rachel Enslow, a wind consultant and co-author of the report "China, Norway and Offshore Wind Development," published in March by Azure International for the World Wildlife Fund Norway.

Planned to strategically coincide with the World Expo in Shanghai, which is being fed electricity from the offshore farm, China is ready to show the world what its own homegrown wind technology can do.

All of Donghai Bridge's 34 turbines, 3 MW capacity each, were built by Sinovel Wind Group, China's largest wind turbine manufacturer, though designed in cooperation with American Superconductor. The Beijing-based company began building the farm at the mouth of the Yangtze River Delta in September 2008. CCCC Third Harbor Engineering Co. Ltd., also based in Beijing, installed the turbines, completing construction in February 2010. Shanghai's Zhongtian Technologies Submarine Optic Fiber Cable Co. Ltd. manufactured the 78 km of submarine cable.

Powering 200,000 households while reducing CO2

In China, one key challenge will be developing foundations for the soft seabed commonly found off the coast of the East China Sea, especially since "most offshore wind farms that will be developed in China will be intertidal," said Gerald Page, managing director of Equinox Energy Partners, a venture capital firm in Beijing.

The $337 million project, located 8 to 13 km (about 5 to 8 miles) from the coast, was erected on soft seabed conditions using a multi-pile foundation structure. About eight to 10 legs are placed on concrete piles, on top of which are stacked a concrete tack and then the turbines. Shanghai Investigation, Design and Research Institute conceived the foundation.

During low tide, the turbine foundations are exposed; during high tide, they become submerged in about 5 meters (16 feet) of water. Unlike in Europe, which is much more focused on developing deepwater (greater than 50 meters, or 164 feet, deep) turbine technology, China is exploring unique foundation technology and demonstrating innovative pursuits.

The farm is expected to eventually generate an annual 267 million kilowatt-hours of electricity -- enough to power 200,000 Shanghai households. China's government claims that annually, the wind farm will cut use of 100,000 tons of coal, reducing carbon emissions by 246,058 tons.

Currently, the wind farm's capacity is equivalent to only 1 percent of the city's total power production of about 18,200 MW, which is generated mostly from traditional fuel-based sources, according to China Daily, the state-run English-language daily newspaper in Beijing.

Construction of the Donghai project's second phase, on the west side of the bridge, has been approved by authorities. It, too, is projected to produce about 100 MW. An additional four farms surrounding Shanghai are currently under negotiation, and the city hopes to complete 13 wind farms by 2020, with the majority of the expected 1,000 MW capacity supplied by offshore wind farms.

An industry's itch to expand

The "Development Plan on Emerging Energies" released July 20 outlines wind production goals through 2020 by the Chinese government.

According to the plan, offshore wind power is expected to reach 30 gigawatts, and coastal provinces were required to start drafting offshore wind-grid implementation plans. This includes Liaoning, Shandong, Jiangsu, Shanghai, Zhejiang, Fujian and Guangdong provinces. In the next three to four years, according to the Azure-WWF report, in total, 514 MW should be installed along this coastline. As of March this year, pipelines accommodating 17 MW were already installed between Donghai and a pilot wind project in Bohai Bay near Tianjin.

The expected long-term cumulative pipeline, at 13.7 GW, is nearly halfway to the estimated 2020 goal, but this doesn't necessarily mean that the Mandarins are fully behind renewable technologies and warmly welcoming a greener future.

"The top-level people are cautiously optimistic," explained Andrew Grieve, a senior researcher at J Capital Research, an equities research company based in Beijing. "They are far more optimistic on the local and provincial level."

Behind closed doors, industry insiders hear buzz and speculation that coastal provinces' plans far exceed the existing Chinese central government's plans.

Grieve stressed that the real force for wind comes from manufacturers that are itching to expand the market. "Comparatively speaking," he said, "the central government is the most conservative of the lot."

All this is without official numbers, as the 12th Five-Year Plan (for the 2011-2015 time period) has still not been formally unveiled. It remains in final draft form, and though the original release date was slated for March, approval keeps moving backward. Analysts expect the implementation date should, at the latest, arrive on Jan. 1, 2011.

The central government's aim was to hit 10 GW by 2010, a goal that was quickly surpassed.

"Industry is either going to take their number and beat it, or government is going to have to step in and calm down growth," Grieve said. Rumors support the latter, but given historical trends, the former would seem more likely.

The Azure-WWF report describes the offshore wind energy generation potential in China as huge -- calculated as 11,000 terawatt-hours, similar to that of the North Sea in western Europe.

"China has the largest wind resources in the world, and three-quarters of them are offshore," Barbara Finamore, director of the Natural Resources Defense Council's Beijing office, told Scientific American.

The existing industry is nowhere near that large. As Grieve explained, "apart from the 1 gigawatt of bids this year, there are no central government national targets for offshore wind, although possible national targets of 5 gigawatts by 2015 and 30 gigawatts by 2020 have been suggested." The provincial government-proposed provincial offshore development plans amount to 10.2 GW by 2015 and 22.7 GW by 2020.

The growth in China's wind manufacturing market remains focused on the domestic market -- for now. Dheeraj Choudhary, who runs Parker Hannifin Corp.'s Global Renewable Energy business unit, said "60 to 70 percent of wind turbine market growth has come from domestic manufacturers, and not the international guys."

Joanna Lewis, an assistant professor of science, technology and international affairs at Georgetown University who works as a China program adviser to the Energy Foundation, agreed: "No one has nearly as much capacity [as China] installed in the world." As a result, there is still "very strong demand for wind turbines in China, and they're not at stage where supply exceeds demand."

Eyeing markets abroad

Talk to wind turbine and technology experts and manufacturers, and they see a day not too far off when Chinese-produced (and in some cases, Chinese-invented) turbines will service foreign markets.

Anthony Fullelove, project manager for North Brown Hill Wind Farm, based in Sydney, Australia, expects that his country, as well as Europe and the United States, will see a sharp increase in turbines sourced from China -- as the technology rises to meet global standards and prices drop -- to make wind farms viable especially in a generation sector without a carbon price.

"Turbine manufacturers in China are starting to look for markets abroad upon seeing Chinese market getting tighter and tighter, with more companies selling in China," Lewis added.

For the time being, Chinese manufacturers still work hand in hand with foreign engineers and designers. But that is starting to shift.

"Reliance is much lower," noted Choudhary. Instead, Chinese manufacturers look to foreign companies to provide subsystems and components. All of China's top five turbine manufacturers have worked with foreign engineers yet retained the intellectual property rights on the technologies.

Meanwhile, as China moves forward with installing water-based wind farms as well as developing its domestic technological know-how, not a single offshore wind turbine is in use in the United States.

Though the 130-turbine Cape Wind project, in Nantucket Sound off the coast of Massachusetts, has received federal approval, several potential regulatory and judicial hurdles lurk. Similarly, the Rhode Island Public Utilities Commission recently approved a power purchase agreement proposed for the Block Island farm off of Rhode Island, which would start with an initial eight turbines as a model, yet Attorney General Patrick Lynch (D) has vowed to appeal the decision to the state Supreme Court.

When discussing the creation of an Atlantic Offshore Wind Energy Consortium in February, U.S. Interior Secretary Ken Salazar said it currently takes seven to nine years for offshore wind project to receive approval. At this point, Cape Wind is moving into its 10th year of negotiations.

In comparison, China's Renewable Energy Law was implemented in January 2006. By November 2007, the Bohai model turbine was installed. So important was the Donghai farm to the Chinese Communist Party, it footed the bill to ensure the project would be completed in time for Expo 2010 in Shanghai, during which time China has the eyes of the whole world watching."

[Martian]

China-Russia crude oil pipeline begins operations


Russian Prime Minister Vladimir Putin opens the Russian section of the Russia-China oil pipeline in the Amur region on Sunday.

China-Russia crude oil pipeline begins operations

"China-Russia crude oil pipeline begins operations
The Associated Press
Sunday, August 29, 2010; 11:40 PM

SHANGHAI -- Russia has opened its section of a crude oil pipeline from eastern Siberia to China, a major step in expanding energy cooperation between the neighboring powers.

The 1,000-kilometer (625-mile) pipeline will connect Russian oil fields with Daqing, a major oil production base in northeastern China.

"For China, this will help stabilize its energy supplies and security. For Russia, this offers a new market for exports to the Asia-Pacific region, especially dynamic and developing China," the state-run China National Petroleum Corp. quoted Russian Prime Minister Vladimir Putin as saying, in a statement issued Monday on its website.

Russia is the world's biggest energy producer and China is the world's largest energy consumer, overtaking the United States last year. Although Europe remains Russia's largest export market for gas and oil, both Beijing and Moscow have been seeking to diversify their energy sources and markets, despite a long history of mutual suspicion and tensions.

Speaking at the ceremony Sunday in the Russian city of Skovorodino marking the pipeline's opening, Putin said cooperation would not be limited to oil exports. Russia welcomes Chinese help in exploiting its abundant resources in the Far East and in expanding refining and marketing, he was quoted as saying.

The Chinese segment of the pipeline is still under construction but is expected to begin operations before the year's end, the statement said.

Eventually, the pipeline is to provide 30 million tons of oil a year to China, with exports to the Asia-Pacific region expanding to a total of 50 million tons a year, Putin was quoted as saying.

During a visit by Putin to Beijing late last year, Russia signed dozens of commercial pacts worth $3.5 billion and set the framework for a separate, multibillion-dollar agreement to build two natural gas pipelines to China from gas fields in Russia's Far East that would provide supplies almost matching China's current consumption."

[Martian]

Construction of Sino-Myanmar pipeline starts

"Construction of Sino-Myanmar pipeline starts
(Xinhua)
Updated: 2010-09-10 21:37


A ceremony is held to mark the start of construction of the China section on the Sino-Myanmar oil and gas pipeline project in China's Yunnan province.[Photo/Xinhua]


The Sino-Myanmar oil and gas pipeline starts at Kyaukryu port on the west coast of Myanmar and enters China at Yunnan's border city of Ruili.[Photo/Xinhua]


The Sino-Myanmar pipeline is expected to begin operations by the end of 2010.[Photo/Xinhua]

KUNMING -- Construction began on the China section of the Sino-Myanmar oil and gas pipeline Friday morning in An'ning City in southwest China's Yunnan province.

CNPC, China's largest oil firm and parent company of PetroChina (PTR.NYSE; 00857.HK; 601857.SH), will build and operate the pipeline whose construction is due to finish in 2013.

The Sino-Myanmar oil and gas pipeline starts at Kyaukryu port on the west coast of Myanmar and enters China at Yunnan's border city of Ruili.

The 2,380-km long oil pipeline will end in Kunming City, capital of Yunnan. It is expected to carry 22 million tonnes of crude oil per annum to China from the Middle East and Africa.

The natural gas pipeline will be even longer, running from Kunming into Guizhou Province and the Guangxi Zhuang Autonomous Region in south China for a total length of 2,806 km. It is expected to transport 12 billion cubic meters of gas to China every year.

The project is the fourth way for oil and natural gas to enter China, after ocean shipping, the Sino-Kazakhstan pipelines and the Sino-Russian crude oil pipeline.

The oil pipeline saves 1,200 km of shipping. It will reduce China's reliance on the Straits of Malacca for oil imports, experts say.

Construction of the pipeline's Myanmar section began in June.

China has imported more than 20 million tonnes of crude oil through the Sino-Kazakhstan oil pipeline that was put into service in 2006, according to statistics from Xinjiang's import authorities.

The Sino-Russian pipeline is expected to begin operations by the end of 2010.

The new pipelines are in line with China's strategy of diversifying the methods and sources of its crude oil imports, said Qin Guangrong, governor of Yunnan.

"It will lessen risks and strengthen China's ability to cope with the complex and volatile international situation," he said.

The project will help quench south and west China's thirst for energy, Qin added.

Construction in An'ning of an oil refinery with an annual capacity of 10 million tonnes also started Friday."

[Martian]

Central Asia to send 17 bcm gas to China in 2011-Reuters


Chinese President Hu Jintao (2nd L, front), Turkmen President Gurbanguly Berdymukhamedov (3rd L, front), Kazakh President Nursultan Nazarbayev (1st L, front) and Uzbek President Islam Karimov (R, front) attend the inauguration ceremony of the China-Central Asia natural gas pipeline in the gas plant on the right bank of the Amu Darya River, Turkmenistan in this file photo from Dec. 14, 2009. [Xinhua]

UPDATE 1-C.Asia to send 17 bcm gas to China in 2011-report | Energy & Oil | Reuters

"UPDATE 1-C.Asia to send 17 bcm gas to China in 2011-report
Fri Sep 17, 2010 2:41am GMT

BEIJING, Sept 17 (Reuters) - China and Central Asian countries have agreed to pump 17 billion cubic metres (bcm) of natural gas via pipelines in 2011, China National Petroleum Corp (CNPC) said in a company newspaper on Friday.

The volume is equivalent to 20 percent of China's total domestic gas output, Reuters calculation showed.

A coordination committee of the Central Asia gas pipeline between Turkmenistan, Uzbekistan, Kazakhstan and China had made specific plans in terms of monthly gas supplies to China and with regard to the maintenance schedule for the winter of 2010 and full-year 2011, the China Petroleum Daily reported.

The report did not provide monthly supply details.

CNPC, operator of the transborder pipeline that runs nearly 2,000 km through Central Asia before entering Chinese territory in the northwestern Xinjiang region, recently raised the capacity of the line to 24.5 million cubic metres per day or about 9 bcm per year.

The pipeline's capacity is scheduled to grow to 15 bcm by the end of this year and 30 bcm by the end of 2011.

As of mid-July, CNPC had received about 2 bcm of gas via the pipeline, which became operational late last year.

CNPC is the parent of PetroChina (0857.HK: Quote)(601857.SS: Quote)(PTR.N: Quote). (Reporting by Jim Bai and Tom Miles; Editing by Chris Lewis)"

[Martian]

China LNG imports double to record high in August


"Articulated arms for LNG unloading. A similar arrangement will be used at the Guangdong LNG terminal."

The doubling of China's LNG imports tells us three important things.  Firstly, China's economy is booming.  You already knew this.

Secondly, China is serious about meeting the targets of the Copenhagen Accord.  The consumption of natural gas emits less carbon dioxide than coal or oil.  This will slow down global warming.

Thirdly, natural gas is the cleanest fossil fuel.  There are less contaminants in natural gas.  Hence, less pollutants will be released.  As China continues to increase its use of natural gas, the air quality should gradually improve.

Natural gas - Wikipedia, the free encyclopedia
"Natural gas is often described as the cleanest fossil fuel, producing less carbon dioxide per joule delivered than either coal or oil[20] and far fewer pollutants than other fossil fuels.
...
Natural gas produces far lower amounts of sulfur dioxide and nitrous oxides than any other fossil fuel."

UPDATE I-China LNG imports double to record high in August | Energy & Oil | Reuters

"UPDATE I-China LNG imports double to record high in August
Fri Sep 17, 2010 9:41am GMT

*Aug LNG imports double to record high

*Most additional volume arrived at Dapeng

BEIJING, Sept 17 (Reuters) - China's imports of liquefied natural gas (LNG) doubled in August from a year earlier to a record high of about 1 million tonnes, an official source who had seen the trade data said on Friday.

Most of the additional volume likely arrived at a terminal in the southern Guangdong province, sources said.

The August imports were about 40 percent more than in July when China shipped in 711,716 tonnes of LNG.

China imported 462,484 tonnes of LNG in August 2009.

Imports at the Shanghai terminal were steady compared with previous months, but three LNG carriers sailed into a terminal in Fujian in August that normally takes two cargos a month, the sources said, declining to be named because they were not authorised to speak to the media.

"Most additional cargos must have headed to Dapeng," one source said.

Dapeng, in the southern province of Guangdong, is China's first LNG receiving terminal.

China, a fledging consumer of the super-cooled gas, has three receiving terminals in operation and is expected to add another two in the next year.

(Reporting by Tom Miles and Jim Bai; Editing by Ken Wills)"

Sinopec starts building 1st LNG receiving terminal | Energy & Oil | Reuters

"Sinopec starts building 1st LNG receiving terminal
Mon Sep 13, 2010 4:34am GMT

BEIJING, Sept 13 (Reuters) - China Petroleum & Chemical Corp (Sinopec) (0386.HK: Quote) started building its first liquefied natural gas (LNG) receiving terminal in eastern Shandong province last Friday after the project received final approval from the government.

The Qingdao terminal, able to handle 3 million tonnes of LNG imports per year, would cost 9.66 billion yuan ($1.43 billion) and was scheduled to be operational by November 2013, Sinopec 6000258.SS(SNP.N: Quote) said on Monday in a report on one of its websites (??).

The project includes three LNG storage tanks with a capacity of 160,000 cubic metres each, one berth able to dock LNG carriers with shipping capacity ranging from 80,000 to 270,000 cubic metres and receiving facilities, as well as 400 kilometres of gas pipelines with a designed capacity of 4 billion cubic metres (bcm) per year.

Sinopec struck its first LNG deal late last year to buy 2 million tpy of the clean fuel for 20 years from Exxon Mobil Corp's (XOM.N: Quote) Papua New Guinea project.

The scale and schedule of the second phase of the Qingdao project would be determined later, subject to LNG resources and domestic gas market development, the company said.

Sinopec's domestic gas output would surpass 10 bcm this year and the length of its gas pipeline networks would reach 6,500 kilometres by the end of this year, it added.

(For a factbox of China's LNG projects and plans, double click:[ID:nTOE68906Y]) ($1=6.769 Yuan) (Reporting by Jim Bai and Aizhu Chen; Editing by Chris Lewis)"

[Martian]

Russia, China to invest $5.0 billion dollars in refinery: aide


The Sino-Russian refinery will resemble the one shown above.
[A general view of China National Offshore Oil Corporation's (CNOOC) oil refinery in Huizhou, China's southern Guangdong province on July 28, 2009. The CEO of CNOOC and Shell Petrochemical Co. said on Tuesday the joint venture plans to invest 1 billion yuan to expand capacity by 20 percent by the middle of 2010.]

AFP: Russia, China to invest 5.0 billion dollars in refinery: aide

"Russia, China to invest 5.0 billion dollars in refinery: aide

(AFP) – 14 hours ago

MOSCOW — Russia and China agreed on Tuesday to invest five billion dollars in the construction of a refinery in China as Moscow seeks to diversify its energy clients, an aide to Russian deputy prime minister Igor Sechin said.


Russian deputy prime minister Igor Sechin

Rosneft, Russia's biggest producer of crude, and China National Petroleum Corporation (CNPC) agreed earlier in the day to build a new, 13-million-tonne per year refinery in Tianjin, a port city near Beijing, Rosneft said.

"Investments in the project will total five billion dollars (3.8 billion euros)," a Sechin aide told AFP from Tianjin.

Russia will own 49 percent in the project and China 51 percent, he said.

"This is just the construction of the plant," he said, adding that under the second phase of the project the two companies planned to build at least 500 petrol stations in China.

Sechin, who is in China ahead of President Dmitry Medvedev's visit there on September 26-28, is in talks with Chinese officials and attended a ground-laying ceremony for the new refinery in Tianjin earlier in the day.

Russia will supply 70 percent of the crude to the plant, while the remaining 30 percent would come from the Middle East, Sechin's aide said, speaking on condition anonymity in line with government policy.

Rosneft said in a statement that the plant would be completed in 2015, while Sechin's aide said a feasibility study for the plant would be ready within the next six months.

It will take another two years to build the plant once the feasibility study is done, he added.

In recent years, Moscow and Beijing have intensified energy cooperation as Russia is keen to diversify its client base beyond its traditional European consumers and China is seeking to secure energy resources to fuel its growing economy.

Rosneft president Eduard Khudainatov, speaking at the ground-breaking ceremony, called the refinery a "landmark in the history of Russian-Chinese relations."

"This is another practical step in the development of cooperation between the largest oil companies of our two countries," Rosneft quoted him as saying.

Travelling to China at the invitation of Chinese President Hu Jintao, Medvedev will visit Dalian, Beijing and Shanghai, the Kremlin said."

[Martian]

BG Group and China's CNOOC sign massive 20-year LNG sales deal


Liquefied Natural Gas (LNG) terminal

BG Group and China's CNOOC sign massive 20-year LNG sales deal - Proactiveinvestors (UK)

"BG Group and China's CNOOC sign massive 20-year LNG sales deal
Wednesday, March 24, 2010

BG Group (LSE: BG) has signed a Liquefied Natural Gas (LNG) sales contract with state-owned China National Offshore Oil Corporation (CNOOC), concluding negotiations announced in May 2009, for the supply of 3.6 million tonnes of LNG per annum (mtpa) over a 20-year period. The deal is reported to be worth between US$40-80bn depending on varying oil price assumptions.

"These agreements are a landmark development in the relationship between our two companies, building on what is already a close and productive partnership in deep water exploration, offshore China”, BG chief executive Frank Chapman commented. “CNOOC is a highly accomplished company and we look forward to working together as we bring this new ground-breaking LNG project to fruition".

Under the terms of the contract, CNOOC will be supplied with LNG manufactured at the Queensland Curtis LNG facility, Australia. BG Group may also supply CNOOC from the group's global LNG portfolio.

The agreement is one of the largest LNG contracts in Australia. It is the world's first fully-termed sale and purchase agreement for the supply of LNG from coal seam gas, and marks the first sale of LNG from coal seam gas into China, BG said.

The Queensland Curtis LNG development is supported by BG’s LNG supply agreements for a total of 8.3mtpa, consisting of the 20-year CNOOC deal for 3.6mtpa, a 21-year agreement to supply Chile with 1.7mtpa and a 20-year agreement to supply up to 3mtpa to Singapore.

The facility is being developed by BG's wholly owned Australian subsidiary and subject to government approval, the FTSE100 constituent expects to sanction the project this year. The plant is expected to come on-stream by 2014. The plant will be supplied with coal seam gas from the extensive acreage in the Surat Basin.

Under the terms of parallel agreements between BG Group and CNOOC, the Chinese company is also investing in the development of the facility. CNOOC will acquire a 5% equity interest in the reserves and resources of certain BG tenements in the Walloons Fairway of the Surat Basin in Queensland. BG said the total book value of sold assets is approximately US$270 million.

CNOOC will also take a 10% equity investor in facility’s Train 1,  which is the first of two liquefaction trains to form the first phase of the development. Additionally, the Chinese company will reimburse BG for 10% of costs incurred in respect of Train 1, which is expected to be paid in cash later this year. Furthermore, BG Group and CNOOC have agreed to participate in a consortium to construct two LNG ships in China that will be owned by the consortium.

BG Group and CNOOC have been in partnership in offshore exploration in China since 2006, and in 2008, the two companies agreed to explore further opportunities for strategic cooperation."

http://en.wikipedia.org/wiki/BG_Group

"BG Group plc (LSE: BG.) is a global oil and gas company headquartered in Reading, United Kingdom. It has operations in 25 countries across Africa, Asia, Australasia, Europe, North America and South America and produces around 680,000 barrels of oil equivalent per day.[2][3] It has a major Liquefied Natural Gas (LNG) business and is the largest supplier of LNG to the United States.[4]

It is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index."

[Martian]

China deepens its resolve on energy security


China's Hai Yang Shi You 201, the "first deepwater pipe-laying [vessel] in Asia capable of operating at a water depth of 3,000 meters."

Press Center-Press Center-Deepwater Pipe-laying Vessel "Hai Yang Shi You 201" Docks for Debugging---Powered By SiteEngine

"On May 28, "Hai Yang Shi You 201" docked at the offshore engineering yard of Jiangsu Rongsheng Heavy Industries for outfitting and debugging.

Invested upon by Offshore Oil Engineering Co., Ltd. (COOEC), it is the first deepwater pipe-laying crane in Asia capable of operating in a water depth of 3,000 meters. With a Dynamic Positioning Class 3 System and a lifting capacity of 4,000 tons, "Hai Yang Shi You 201" is equipped to operate in unrestricted navigation outside the Arctic.

"Hai Yang Shi You 201" has integrated a number of world-class manufacturing technologies, and its detail design and construction were independently carried out in China. It belongs to the Eleventh Five-Year National Science and Technology Program and National High-Tech R & D Program, or 863 Program.

The project was launched in May 2005 and the construction began in September 2008. After the completion of "Hai Yang Shi You 201", COOEC is to take charge of its operation.

Release date: 28 May 2010"

China deepens its resolve on energy security > Oil News

"China deepens its resolve on energy security
OilOnline Managers posted on 7/13/2010

Chinese companies have stepped up their activities over the last year, and two recent reports from analysts Infield Energy Analysts and Wood Mackenzie suggest increased activity in the near future, especially as the NOCs venture into deeper waters.

In China's deepwater campaign, Infield forecasts a large-scale home-grown exploration and development campaign off China.

Over the next two decades, CNOOC plans to invest $30 billion in deepwater plays in the South China Sea with an aim to increase production of oil and gas to over 1 million b/d by 2020. Chinese NOCs, however, have little experience in deepwater operations, the report observes, as 98% of the country's operational platform infrastructure is within water depths of 500m or less.

China is moving into deepwater, though, and the DP3 Hai Yang Shi You 981 - the first deepwater semi to be designed and built in China - left the Shanghai Waigaoqiao Shipbuilding yard in late February. It can operate in waters to 3000m and drill to 10,000m. Additionally, Rongsheng Heavy Industry has built a deepwater pipelay vessel. The Infield paper calls the construction of the semi and pipelay vessel 'China's first steps towards a deepwater campaign'.

Of CNOOC's $30 billion planned investment, $2.2 billion will be used to engineer and fabricate a deepwater MODU, $880 million will go to the fabrication of a 3000m water depth drilling vessel, and $440 million is earmarked for a deepwater pipelay vessel, the paper notes. CNOOC believes the South China Sea is the offshore equivalent of its Daqing oil field, which produced 1 million b/d at its peak.

So far, CNOOC has, as a partner, logged a few deepwater finds offshore China, including the Liuhua 29-1 field and the nearby Liwan 3-1. The latter's FEED is complete, and a development plan was submitted to regulatory authorities earlier this year. Liwan 3-1, discovered in 2006, was the first deepwater discovery in Chinese waters; it holds an estimated 100-150bcm of gas. About a month ago, Husky Energy, operator of both the Liwan 3-1 and Liuhua 34-2 fields, announced an appraisal at its Liuhua 29-1 discovery in 765m of water gave 'encouraging results'.

The Liuhua 29-1 field is Husky's third significant deepwater gas discovery in block 29/26.

Sinopec is also launching a deepwater program and has acquired a stake in block 18 offshore Angola. Sinopec's plan is to gain deepwater experience offshore Angola and use the experience to develop its deepwater assets offshore China, according to the report.

PetroChina has also acquired three deepwater blocks offshore Myanmar. The company plans to start deepwater exploration in the South China Sea in 2015.

In Wood Mackenzie's recent report Chinese NOCs step up international expansion, the firm said its review indicates intense activity over the last year will result in net overseas production reaching a new record level of 1 million boe/d in 2010 from CNPC/PetroChina, Sinopec and CNOOC combined.

'In total the three Chinese NOCs [i.e. National Oil Company] have committed nearly US$25 billion to asset and corporate acquisitions since April 2009, far exceeding previous annual spending,' says Norman Valentine, senior analyst at WoodMac. 'Until recently Wood Mackenzie has characterized international expansion by the Asian NOCs as relatively conservative. Acquisitions over the last 12 months have changed the picture - we estimate that the three Chinese NOCs alone accounted for nearly 20% of global deal value in the first quarter of 2010.'

WoodMac anticipates this increased activity will continue.

'With large-scale deals of over US$9 billion committed so far in 2010, we expect the Chinese NOCs to maintain high levels of deal activity,' Valentine says.

The firm estimates Chinese companies have accessed 2 billion boe of commercial reserves.

As a result, Valentine says, WoodMac expects the NOCs will produce over 1 million boe/d from overseas operations this year.

WoodMac concludes that while it may take some time for Chinese NOCs to be considered leading players in the industry's emerging resource segments, Chinese NOCs are well positioned to maintain high levels of corporate activity in the future and build on the milestone production levels of 2010. OE

By: Jennifer Pallanich
Issue: July 2010"

[Note: Thank you to "marchpole" for the picture of "Hai Yang Shi You 201" deepwater vessel.]

[marchpole]

Russia, China agree gas supply terms: Gazprom
(AFP) – 11 hours ago

MOSCOW — Moscow and Beijing have agreed on key supply terms for future Russian gas deliveries to China, which is seeking to secure energy resources to fuel its growing economy, Gazprom said on Wednesday.

Russian gas giant Gazprom, keen to diversify its energy clients, has been in talks with China National Petroleum Corporation (CNPC) to start sending gas to China but the two countries have yet to agree on pricing.

Gazprom, the world's largest gas producer, said in a statement on Wednesday that Russian and Chinese officials in Beijing had agreed on "key targets and parameters of the future supplies of Russian natural gas," adding that supplies were scheduled to start in 2015.

The statement did not provide further details.

During Prime Minister Vladimir Putin's visit to Beijing last October, Gazprom and CNPC signed a framework agreement that could see about 70 billion cubic metres of natural gas sent to China yearly.

No financial details were released at the time and Putin only said the companies would peg the gas price to an "Asian oil basket."

Top energy officials, including Putin's powerful deputy in charge of energy, Igor Sechin, and Gazprom deputy chief executive Alexander Medvedev, are in China ahead of President Dmitry Medvedev's visit there on September 26-28.

Sechin said Russia and China would agree on the pricing terms in the first half of next year, a government statement said on Tuesday.

Earlier Tuesday Russia and China had agreed to invest five billion dollars in the construction of a refinery in Tianjin, a port city near Beijing, a Sechin aide said.

http://www.google.com/hostednews/afp/artic...KLV_ZaIe-QjranA

[Martian]

CNOOC finds pearl in Enping


China National Offshore Oil Corporation (CNOOC) Floating Production, Storage, and Offloading vessel (FPSO)


Helicopter landing on CNOOC FPSO

CNOOC finds pearl in Enping - Upstream Online

"CNOOC finds pearl in Enping

CHINA National Offshore Oil Corporation (CNOOC) has made a significant oil discovery in the Enping Trough of the Pearl River Mouth basin in the eastern part of the South China Sea.

Xu Yihe  18 June 2010 01:47 GMT


Hopes: Enping find raises CNOOC's expectations in the South China Sea

Industry sources said that the find could pave the way for a new standalone field development based around a floating production, storage and offloading vessel.

The discovery, which has yet to be publicly confirmed, was made through the drilling of exploration well Enping 22 in late May. The discovery well confirmed a pay zone thickness of more than 100 metres, one source said. Sources added that CNOOC could announce the discovery soon.

The well lies at a location about 100 kilometres south-west of the Panyu oilfield, which was just surrendered to CNOOC by Devon Energy in April and north of Block 28/20, which is being explored by Italy's Eni.

Industry officials suggested that oil reserves at the Enping Trough discovery could total up to 30 million cubic metres (190 million barrels), which could support a scheme to produce 30,000 barrels per day when production starts.

The field is 100% owned by CNOOC, which is understood to be planning to drill appraisal wells to further determine the size of the reserves.

Once confirmed, Enping could turn out to be the largest find to have been made in the shallow waters of the South China Sea in recent years.

Its discovery will be a boost for CNOOC's amibitions to double its domestic hydrocarbons supply, including liquefied natural gas imports, to 100 million tonnes per annum (2 million barrels of oil equivalent per day) by 2020. China's offshore output capacity is expected to reach about 1.4 million boepd by 2015, up from an expected tally of about 1 million boepd this year.

CNOOC has participated in major deep-water success on deep-water block 29/26 where operator Husky Energy has made multi-trillion cubic feet natural gas discoveries that are set to be developed. However, discoveries in the shallow-water areas at the Pearl River Mouth basin have been scarce in recent years potentially making Enping a new breakthrough.

CNOOC does have some acreage in the Enping Trough that is on offer to foreign companies for exploration. Block 27/06 is categorised as being in the region, though it is not immediately clear how close that acreage is to the Enping 22 discovery.

Well-placed industry officials said CNOOC is already thinking about building a new floater to develop the field once reserves and an overall development plan confirm that it justifies commercial production.

"The new discovery doesn't favour tie-back development, as the nearest producing field is about 100 kilometres away," said one source.

Since 1993, China has built about 13 of the 17 floaters currently operating in its waters. Some of these producing floaters have also been upgraded or had their lifespans extended.

Published: 18 June 2010 01:47 GMT  | Last updated: 18 June 2010 01:47 GMT"

[Martian]

Cuba to Start Offshore Oil Exploration in Early 2011

"Due to the longstanding U.S. trade embargo against Cuba, the embargo limits the amount of U.S. technology that can be used" by Cuba.  To unlock her offshore oil wealth, Cuba had to wait until China's equipment-manufacturing industry was sufficiently advanced to provide the complex technology.  The time has come.

Cuba to Start Offshore Oil Exploration in Early 2011 | Offshore Energy Today

"Cuba to Start Offshore Oil Exploration in Early 2011
Posted on Aug 3rd, 2010



A Chinese-built drilling rig is expected to arrive in Cuban waters in early 2011; likely opening the way for full-scale exploration of the island’s untapped offshore fields.

Companies with contracts to search for oil and gas in Cuba’s portion of the Gulf of Mexico have already begun preparations to drill once the Scarabeo 9 rig gets on the spot. An official with Saipem, a unit of Italian oil company Eni told Reuters the massive semisubmersible rig should be completed at the Yantai Raffles shipyard in Yantai, China, by the end of this year.

The journey to Cuba will take two months, and once it arrives it will be put into operation almost immediately, said the official, who asked not to be identified. It will be used first as an exploratory well for a consortium led by Spanish oil giant Repsol YPF, which drilled the only offshore well in Cuba in 2004 and said at the time it had found hydrocarbons.

Cuba has said it may have 20 billion barrels of oil in its offshore, but the U.S. Geological Survey has estimated a more modest 4.6 billion barrels and 10 trillion cubic feet of gas. Repsol has been mostly silent on the long delay in drilling more wells, but it is widely assumed in the oil industry it was due to the longstanding U.S. trade embargo against Cuba.

The embargo limits the amount of U.S. technology that can be used, which complicates finding equipment because U.S. companies have long dominated the offshore oil business.

A number of oil service companies have solicited information about Cuban regulations, diplomats said. Cuba’s state-owned oil company Cupet has been silent about the offshore activity and rejected requests for interviews.

A government official said the requests were denied because Cupet did not want to speak during the BP oil spill in the Gulf.

The spill has never reached Cuba, but it has heightened safety concerns both in the government and among oil companies with offshore blocks, sources said.

The prospect of drilling in Cuban waters has also raised pollution fears in Florida, which is just 80 km away from the island’s maritime boundary."

[aziqbal]

Thanks for the posts Martain keep them coming

[Martian]

CNPC reports major gas discovery in Turkmenistan


China-Turkmenistan cooperation.
(File photo: "On August 29 2008, President of Turkmenistan Gurbanguly Berdimuhamedov and Chairman of the People’s Republic of China Hu Jintao, who had arrived on an official visit to Ashgabat, held talks in the Turkmen capital.")

CNPC reports major gas find in Turkmenistan | Energy & Oil | Reuters

"CNPC reports major gas find in Turkmenistan
Tue Sep 28, 2010 3:35am GMT

BEIJING, Sept 28 (Reuters) - State-owned China National Petroleum Corp (CNPC) has discovered a major gas field on the right bank of the Amu Darya River in Turkmenistan that will beef up supplies to China, the company said on Tuesday.

CNPC Amu Darya River Natural Gas Corp had struck a steady flow of 1.439 million cubic metres of gas and 36.2 cubic metres of condensate oil from exploration well Oja-21 in block B on Sept. 21, CNPC said in a company newspaper.

A series of tests showed the region contained rich gas resources with potential geological reserves of more than 100 billion cubic metres (bcm) that could become a highly productive field, the report said.

CNPC planned to send 3 bcm of gas to China this year from the Amu Darya natural gas project, operated by CNPC under a production-sharing agreement with Turkmenistan.

Late last year, China and central Asian countries opened their first cross-border natural gas pipeline, which should be able to pump up to 40 bcm of gas per year to China by 2012-13. [ID:nLDE5BD0F2]

The pipeline runs nearly 2,000 km through Turkmenistan, Uzbekistan and Kazakhstan before entering Chinese territory in the northwestern Xinjiang region.

China received 2.38 bcm of gas via the pipeline in the first eight months of the year, according to China's National Development and Reform Commission. (Reporting by Jim Bai and Aizhu Chen; Editing by Chris Lewis)"

[Martian]

China's Tianjing is Asia's (and World's 3rd) largest dredger


Tianjing is China's/Asia's largest dredger.  "The dredgers will deepen the mooring areas along the quays of these ports, which serve the oil & gas industry."

http://www.most.gov.cn/eng/newsletters/201...00204_75813.htm

“'Tianjing,' China’s first large dredger, was delivered to its operator on January 19, 2010 in Shenzhen. 127.5m long and 23m wide, the new boat is equipped with an array of state-of-the-art mud digging equipment; with a total installed capacity reaching 20,020 kilowatts. The onboard reamer is designed with a power of 4200 kw. As the most powerful digging system in Asia, the dredger is able to dredge up large rocks up to 40 Mpa; in addition to mud, sand, and little rocks. Application of a large dredger may reduce the number of sea floor explosion events and boost the safety of projects; in addition to its environmental protection functions.

The boat is also equipped with three efficient mud pumps that can be used to reclaim land from the sea for a distance up to 6,000 m. Its unloading capacity allows the boat to ship the mud and sand it has dug out to other desired destinations; expanding the scope of operation. It works efficiently because of its mobility, easy dispatch, and fine adaptability."

[Martian]

China and Ghana sign US$15 billion worth of contracts


Chinese President Hu Jintao ® shakes hands with his Ghanaian counterpart John Evans Atta Mills during a welcoming ceremony for President Mills at the Great Hall of the People in Beijing, capital of China, on Sept. 20, 2010. (Xinhua/Ding Lin)


Ghana is an enormous West African country.  It is seven times larger than Taiwan or 80 percent the size of Italy.  Africa (e.g. 30,221,532 km2) is an enormous continent that is three times larger than China (e.g. 1/15th of Earth's land-mass or 9,671,018 km2).


Ghana's offshore oil blocks are mostly unexplored.  China can provide the technology and financing to enable Ghana to extract its offshore wealth.

China Business News: China, Ghana sign US$1.5 bln for infrastructure, oil and gas

"China, Ghana sign US$15 bln for infrastructure, oil and gas

Sep. 28, 2010 (China Knowledge) - China and Ghana, a West African country, last week signed a total of US$15 billion worth of contracts, including US$10.4 billion of bank lending for infrastructure project and US$3 billion of bank loan for oil and gas development, during a six-day Beijing visit by Ghanaian President John Atta Mills, sources reported.

The move is the latest in a string of Chinese investments on the resource-rich continent.

China Export Import Bank and the government of Ghana signed a US$10.4 billion concessionary-loan agreement for various infrastructure projects. The 20-year loan is subject to approval from the Ghanaian parliament and cabinet.

Ghana also signed a US$3-billion loan agreement with the China Development Bank to help develop Ghana's oil-and-gas sector. In addition, CDB guaranteed more than US$400 million for water and e-governance projects in Ghana.

Moreover, Ghana inked an agreement worth US$1.2 billion with Chinese company Bosai Minerals Group to build a bauxite and aluminum refinery in Ghana over four years. Bosai Minerals would purchase an 80% stake in Ghana Bauxite Co."

China To Build Two Regional Hospitals In Ghana | Social | Peacefmonline.com

"China To Build Two Regional Hospitals In Ghana
Date: 24-Sep-2010

Shangai Construction Company in China has agreed to build two regional hospitals in Wa and Kumasi to enhance healthcare delivery. The gesture by the Chinese company is in support of the government’s ‘Better Ghana’ agenda in the health sector.

This was the outcome of President John Evans Atta Mills tour of the offices of the Shangai Construction Company on Thursday, September 23 as part of his official visit to China. Speaking to the Daily Graphic via telephone from China, the Communications Director at the Presidency, Mr. Koku Anyidoho, said the company had given the indication to support Ghana’s development efforts, particularly in the fields of infrastructural development and health delivery, which were of prime importance to President Mills.

President Mills enjoys special friendship with his Chinese counterpart, both of whom were Vice-President in the history of their respective countries. Mr. Anyidoho quoted President Hu as saying that his commitment to support the Mills administration was born of his conviction that “Whatever we do for Ghana will not be abused and misused”.

President Mills thanked the company for the support, believing that the good health of the people would lead to a healthy nation. He gave the assurance that whatever had been received would be used for their intended purpose.

In a related development, Mr. Anyidoho said a telecommunication company, Huawei, had pledged $6 million towards Ghana’s e-Governance project. Additionally, the company has agreed to offer scholarships to 30 Ghanaians to receive training in telecommunications in China.

Source: Daily Graphic"

GBC News, Top Story, Ghana, China to sign $270m Agreement for Kpong Water Project

"Ghana, China to sign $270m Agreement for Kpong Water Project

A $270 million loan facility to carry out expansion works at the Kpong Water Project is expected to be signed between the governments of Ghana and China when President John Evans Atta Mills begins his state visit to that country on September, 19.

The deal will ensure an additional supply of 40 million gallons of water daily to Accra and its environs to reduce the perennial water shortages in some parts of the national capital.

This was a key outcome of bilateral discussions between Vice-President John Mahama and the Minister of Commerce of China, Chen Deming, held on the sidelines of the World Investment Forum taking place at the port city of Xiamen , China .

In his remarks prior to a closed door meeting with Mr. Chen, Vice-President Mahama said the government was looking forward to signing the agreement as it would be a landmark of Ghana-China relations, especially on the eve of the 50th anniversary celebration of diplomatic relations between the two countries.

He told the Chinese minister that the Kpong water expansion project would contribute in no small way to helping Ghana to achieve the Millennium Development Goal on water. He said though the country was on track to attaining the MDG goal on water, the same could not be said for sanitation.

Government, he said was leaving no stone unturned in ensuring that progress was made in the sanitation sub-sector and the area of maternal and infant mortality. He stated also that Ghana was on course to halve poverty by 50% by 2015.

Vice-President Mahama expressed the hope that with the assistance and support of countries such as China , Ghana would be able to marshal the requisite investments and development assistance to enable it to achieve the MDG targets."

[Martian]

Repsol Sells Brazil Stake to Sinopec for $7.1 Billion


Repsol's offshore Brazilian fields

Repsol Sells Brazil Stake to Sinopec for $7.1 Billion - WSJ.com

"Repsol Sells Brazil Stake to Sinopec for $7.1 Billion
OCTOBER 1, 2010, 5:29 A.M. ET
By SANTIAGO PEREZ

MADRID—In one of the largest Chinese oil acquisitions to date, Spain's Repsol SA Friday announced the sale of 40% of its Brazilian assets to China Petroleum & Chemical Corp. for $7.1 billion.

The joint-venture, valued at $17.8 billion overall, guarantees Repsol key funding to explore vast and coveted offshore oil fields in South America's largest economy, Repsol said in a statement. Sinopec officials couldn't be reached Friday.

The joint Brazilian operation will become one of Latin America's largest foreign-controlled energy ventures, as it will develop some of the world's most important exploratory discoveries in recent years, Repsol said in a filing with the stock market regulator. Repsol will have controlling interest in the joint venture with a 60% share.

"With this new investment, Repsol Brasil is fully capitalized to develop all of its current projects in Brazil, including world class discoveries in the Guara and Carioca pre-salt basins," Repsol said in a press release.

The transaction is also another sign of China's growing prominence on the international energy scene, as it expands its access and ownership of raw materials needed to back the country's economic expansion. The largest oil takeover by a Chinese company to date has been Sinopec Group's $7.2 billion acquisition in 2009 of Addax Petroleum Corp., based in Switzerland, only slightly more than the venture announced Friday.

In June, the International Energy Agency said that overseas investments by China's national oil companies in 2010 look as if they will outpace by far the $18.2 billion spent in 2009, and that was before the Repsol-Sinopec announcement. From January 2009 to April 2010 alone, the three majors—China National Petroleum Corp., Sinopec and Cnooc—spent around $29 billion world-wide to acquire oil and gas assets, the IEA said.

In addition to those direct investments, CNPC and Sinopec were involved in 11 loan-for-oil deals with eight countries worth $77 billion, and the companies entered contracts committing them to invest at least $18 billion in future exploration and development, mostly in Iraq and Iran, the IEA noted.

Sinopec Chairman Su Shulin at a post-earning press conference on Aug. 23 said his company was studying more overseas acquisition possibilities and confirmed that parent company Sinopec Group, which is state-owned, was in talks with Brazil's OGX Petroleo e Gas Participacoes SA over a bid for offshore assets in Brazil. Sinopec's 2010 first-half net profit rose 6.7% to 35.46 billion Chinese yuan ($5.3 billion) from 33.25 billion yuan a year. Sinopec has oil and gas exploration and production projects in more than 20 countries.

Brazil is a key target for Chinese investment, with resources deals worth $4.3 billion agreed so far this year compared with $362 million in 2009, according to data from Dealogic

Brazilian state oil company Petroleo Brasileiro SA, or Petrobras, also agreed to a $10 billion loan from China Development Bank last May in exchange for crude-oil supply to Sinopec's parent, China Petrochemical Corp., over 10 years. Petrobras also gave Sinopec rights to explore two deep-water blocks in Brazil for oil and natural gas.

Under the deal announced Friday, Repsol will retain 60% of the Brazilian venture, which is valued at $17.8 billion following the stake sale agreement. Repsol and Sinopec will continue their respective expansion plans in Brazil and will participate, jointly or individually, in future bidding rounds in the area, Repsol added.

Recently, Repsol shares were among top gainers and most actively traded in Spain, rising 5.1% to €18.9 ($25.8), lifting Madrid's key IBEX-35, which was 0.3% higher after opening little-changed on Friday. Shares in construction company Sacyr Vallehermoso SA, which owns 20% of Repsol, were jumped 10.7% to €4.85.

Write to Santiago Perez at santiago.perez@dowjones.com"

Sinopec invests $7bn in Brazil oil alliance with Repsol | beyondbrics | FT.com

"Sinopec invests $7bn in Brazil oil alliance with Repsol
October 1, 2010 10:03am
by Barney Jopson
...
China considers access to oil and gas supplies a matter of national security as it is the world’s second-largest oil consumer, after the US, and produces less than half it needs domestically.

Repsol had been preparing its Brazilian operations for an IPO, but that plan will now be abandoned in favour of the Sinopec partnership. A Repsol spokesman told beyondbrics:

    "We’re very pleased with this deal because it’s not only giving us funds for development, but will give us the possibility of having a stable and committed partner when we develop further projects."

For China’s oil majors, a presence in Brazil’s offshore “pre-salt” fields - so called because the oil is trapped under several kilometres of seawater, rock and a layer of salt - could help them gain operating experience in technically challenging situations."

[Martian]

China works to double Strategic Petroleum Reserve capacity by 2013


Bird's-eye view of only one China Strategic Petroleum Reserve (SPR) storage site


A vigilant guard at a China SPR site

- Oil & Gas Journal

"China works to double SPR capacity by 2013
Oct 4, 2010
By Liutong Zhang and Kang Wu

China is moving quickly on construction of its Phase II strategic petroleum reserve and FACTS Global Energy believes most SPR Phase II sites will come on stream by 2012-13, doubling China's SPR capacity. China will also expand commercial crude storage capacity by about 18 million cu m (about 113 million bbl) by end 2012."

China to bolster oil reserves

"China to bolster oil reserves
By Sun Xiaohua (China Daily)
Updated: 2009-03-02 07:54


China is accelerating the build-up of its oil reserves to avoid the economic dislocations the country suffered in 2008 from fluctuations in the world oil price.

China's National Energy Administration (NEA) recently released a plan to build nine large refining bases in coastal areas over the next three years, sources with the China Petroleum and Chemical Industry Association said last week.

The plan involves building three 30-million-ton refinery bases in three cities (Shanghai, Ningbo and Nanjing) in China's economically dynamic Yangtze Delta and six 20-million-ton bases in other coastal areas from Tianjin in the north to Guangzhou in the south. It will also facilitate major joint-venture refinery projects between Chinese companies and partners from oil-producing countries such as Venezuela, Qatar and Russia.

The refinery scheme is part of China's plan to bolster its oil inventories. The NEA announced at a national energy conference in early February that China will, in addition to the current four strategic petroleum reserve (SPR) bases, build eight new ones by 2011. The program will increase China's strategic crude reserve capacity to 44.6 million cu m, or 281 million barrels.

The country will also increase its refined oil reserve to 10 million tons by 2011, a source familiar with the stockpile plan told China Daily in February.

"China's attentiveness to its oil reserve capacity has grown in tandem with its rising dependence on imported oil," said Pan Jiahua, an expert with the Chinese petroleum society.


This undated file photo shows an oil reserve base in eastern China's Zhejiang province. [Asianewsphoto]

China, the world's second largest oil consumer, relies on imports for about half of its oil needs. It imported 178.9 million tons of crude oil in 2008, up 9.6 percent from the previous year, according to the National Development and Reform Commission.

The country's lack of strategic oil reserve became a pressing concern during the steep oil price surge from 2004-07, when the Chinese government and state energy companies were left at a disadvantage compared to other major oil-consuming countries. China's national oil inventory reportedly covered only 21 days of its economy's need. Reserves in other countries, such as Japan and the United States, were enough for 100 days.

"China's construction of SPR started pretty late. The country's rising reliance on imported oil and the sharp fluctuation in world market made it a strategic issue," said Pan.


NEA's chief Zhang Guobao said in February that China still "badly needs" energy. His administration plans to ensure a 200-millon-ton domestic annual oil output from 2009-11 but the trend of growing dependence on imported oil will remain. China is expected to import 60 percent of its oil in 2020.

Taking advantage

"The country should take advantage of falling global energy prices to increase its oil reserves," Zhang wrote in a signed article in the official People's Daily in January.

Where China's new eight SPR tanks will be built so far remains unannounced, although there has been a lot of guesswork. All four existing SPR bases are in coastal areas but Pan said some of the new ones will likely be built in the hinterland.

The government's decision to increase oil inventory seems well-received across China. A recent web survey by People's Daily of 2,569 participants, showed 98 percent of them agree China should buy more oil now at a relatively low price. Surveys by other major Chinese portals showed similar results.

But China cannot simply take advantage of attractive prices and store as much oil as it wants because its current reserve capacity is not commensurate with its energy appetite.

Customs statistics shows China's crude imports in January even fell 7.99 percent year-on-year. A slowing economy bears most of the blame but analysts said the country's limited capacity also played a role.

Zhao Youshan, head of the petroleum distribution committee of the China General Chamber of Commerce, an industry group, recently submitted a proposal to oil-related government agencies, calling for using tanks controlled by private companies to store more cheap oil.

Zhou said in his proposal that China's more than 600 private oil companies have 230 million tons worth of storage tanks, almost ten times the capacity of the eight new SPR tanks combined.

China has massive private oil storage facilities, built up by oil companies since China opened its oil markets to private operators in the mid-1990s. But State companies, mainly China National Petroleum Corp (CNPC) and China PetroChemical Corp (Sinopec), basically control oil-importing licenses and hundreds of private oil distributors and refiners are currently sitting on empty tanks.

Zhou said in his report that the industry slump last year has left many private oil companies broke and that some of the survivors are struggling with the high maintenance cost of empty tanks.

Using idle private tanks for national oil reserves could be a win-win situation; the country can cheaply increase storage capacity and private companies can use the extra business to pull through the recession, according to Guan Qingyou, an energy expert at Tsinghua University.

But some analysts said the involvement of private companies in SPR is not likely soon, as the government needs to make sure this is done the right way.

"If import licenses are issued to private companies and there is no proper management, that could lead to speculation and oil market disorder and even threaten national security," said Tong Lixia, a Ministry of Commerce researcher.

'So the government has to weigh the pros and cons very carefully.'"

[Martian]

China and Mongolia plan to jointly build new highway for coal transportation


"It's no coincidence that the Asian giant is the world's largest coal user. The world's fastest-growing economy is also the world's fastest-growing coal market, accomplishing what no other nation has by navigating industrialization, urbanization and modernization all at once.

China uses coal to fuel approximately 80 percent of its electricity for basic needs and for providing the steel that creates the foundation for its fast-growing cities. It is expected to use more electricity than the entire Western Hemisphere in as little as the next two decades as hundreds of millions of citizens transition from rural to urban lifestyles.

More steel is going into the ground in China than anywhere else in the world: In fact, China consumed enough iron and steel last year to rebuild the entire U.S. commercial air fleet. Perhaps that's why China accounts for more than 60 percent of the global metallurgical coal market, most of which is used domestically for steel production."


"Photo of a coal mine in Mongolia: Flickr/Wolfiewolf"


Highway to Datong China, near Mongolian border

http://news.xinhuanet.com/english2010/chin.../c_13543285.htm

"China and Mongolia plan to jointly build new highway for coal transportation
English.news.cn   2010-10-05 15:12:46

HOHHOT, Oct. 5 (Xinhua) -- A new highway linking China and Mongolia is expected to be jointly built by the two countries with a total investment of 2.51 billion yuan (around 375 million U.S. dollars), local authorities said Tuesday.

The new highway is planned to be 245 kilometers in length and will run from Mongolia's southwest Omnogovi Aymag Province to Ganqimaodu, a border town in China's Inner Mongolia Autonomous Region, said a regional government official.

Two firms from China and Mongolia plan to set up a joint venture, which will be the main builder of the highway. The Mongolia firm will own 51 percent of the joint venture while the China firm the remaining 49 percent.

Construction of the highway is scheduled to be completed in two years.

The project plan had been submitted to the authorities of the two countries respectively, the official said.

The new highway was expected to improve coal transportation between the two countries, as well as promote economic development in China and Mongolia, the official said.

Trade between China's Inner Mongolia Autonomous Region and Mongolia reached 5.33 billion U.S. dollars and jumped 33.5 percent year on year over the first eight months of this year. As of Sept. 22, around 5.24 million tonnes of coal had been transported to China via Ganqimaodu."

[Martian]

World energy map is constantly changing


"Air-cooled heat exchangers are intensively used by LNG plants."

World energy map is constantly changing - Telegraph

"World energy map is constantly changing
By Andrew Cave
Published: 1:33PM BST 20 Sep 2010

New discoveries of energy sources and evolving technology mean that producers are frequently jostling for position.


The map of gas and oil supply is constantly changing.  Photo: Peter Grundy

The global energy map is constantly changing.

Take oil, for example. Despite the discovery of large oil reserves in Alaska, the North Sea, Canada, the Gulf of Mexico and the opening up of Russia, the 12 Organisation of the Petroleum Exporting Countries (OPEC) nations – Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela – still account for two-thirds of the world’s oil reserves.

However, they now account for only about one third of the world’s oil production, ahead of the 32 members of the Organisation for Economic Co-operation and Development, who produce 24 per cent, and the Post-Soviet states, with 15 per cent.

According to the CIA Fact Book, the top five oil-producing countries in 2009 were Russia, Saudi Arabia, the US, China and Iran, while the top oil exporters were Saudi Arabia, Russia, Iran, the United Arab Emirates and Nigeria. Britain is ranked 14th among exporters.

The picture is also complicated by unconventional energy sources. For example, the world’s largest deposits of oil sands occur in Canada and Venezuela, each of which has oil sand reserves approximately equal to the world’s total reserves of conventional crude oil.

A report in May by the IHS Cambridge Energy Research Associates predicted that Canadian oil sands will be the top source of crude imports to the US this year.

The list of top gas suppliers reads differently. According to the website EconomyWatch, the top five producers are Russia, Iran, Qatar, the US and Saudi Arabia, with the world’s largest reserves sited in the West Siberian basin.

Russia is the world’s largest pipeline gas exporter, supplying one-third of the European Union’s consumption, but it is now facing competition from shale gas, the largest reserves of which are found in the US.

A Massachusetts Institute of Technology study has predicted that natural gas will provide 40 per cent of America’s energy needs in the future, up from 20 per cent today, thanks in part to the abundant supply of shale gas.

In addition, liquefied natural gas (LNG) has been transformed from a regionally traded fuel to a globally traded energy source over the past few years amid technological developments, cheaper transportation costs and increasing demand for gas from power and transport companies and households.

Industry forecaster The Bharat Book expects the number of countries taking part in LNG trade to increase from 22 to 57 between 2000 and 2015 as global LNG export capacity grows by 74 per cent.

Some 18 countries, headed by Qatar, Indonesia, Malaysia and Nigeria, export LNG, while Angola, Canada, Iran, Papua New Guinea, Peru and Venezuela, are currently planning to begin exports by 2015.

Australia, with eight planned export terminals, is expected to emerge as the world’s largest LNG exporter in 2015. Currently, 345 LNG tankers sail across the world, but this is expected to reach 400 by 2013.

Australia is also the world’s top exporter of coal, ahead of Indonesia, Russia, the US and Colombia.

However, China is the biggest coal producer, while the US is estimated to have the greatest proven recoverable coal reserves."

[Martian]

Qatargas delivers first LNG cargo to China


Global Annual LNG production

Qatargas - News

"QATARGAS DELIVERS FIRST LNG CARGO TO CHINA


First Qatari LNG shipment on Oct. 9, 2009 to China

Shenzhen, CHINA, 19 October 2009: Today Qatargas delivered its first Q-flex LNG cargo to the People’s Republic of China under sales and purchase agreements that had been signed with the China National Offshore Oil Corporation (CNOOC). The deliveries to CNOOC under these agreements will be expected to continue for up to 25 years.

Mr. Faisal M. Al Suwaidi, Chairman and Chief Executive Officer of Qatargas, said: “This is truly an exciting development for Qatargas as we start to deliver LNG under our agreement. China represents a new market for Qatari LNG and we are proud to be able to deliver this first cargo safely and on time. Qatargas is very pleased to be playing an increasing role in providing stable energy supplies to China which has just celebrated its 60th Anniversary.”

“LNG has a key role to play in helping governments around the world improve the diversity of their energy supplies. We are pleased with this development which will help to meet the growing demand for energy in China.”

The cargo is being delivered at the Guangdong Dapeng LNG receiving terminal near the major Chinese industrial city of Shenzhen, utilizing the
Q-Flex ship “Al Ghariya” which departed Ras Laffan Port on October 5th.
Al-Ghariya is part of Qatargas’ integrated shipping fleet which consists of the world’s largest state-of-the-art LNG vessels.  

A formal unloading ceremony was held at the Guangdong Dapeng terminal to celebrate the arrival of the first cargo – it was attended by representatives from both Qatargas and CNOOC.  This is the second cargo of LNG to be delivered to the People’s Republic of China from the State of Qatar – Qatargas delivered its first spot cargo on a conventional sized vessel in September.

Qatargas executed a long term LNG sales & purchase agreement in 2008 with CNOOC to supply two million tones per annum (mtpa) of LNG to the People’s Republic of China for a 25 year time period. This LNG will be supplied from Train 6 of Qatargas 3 joint venture between Qatar Petroleum, ConocoPhillips and Mitsui. Train 6 is anticipated to start producing LNG in 2010.  Until this time LNG will be supplied from the Qatargas 2 Companywhose shareholders are Qatar Petroleum, ExxonMobil and Total.

Qatargas and CNOOC have been working together diligently since the execution of the agreement in order to finalize all of the ancillary requirements to commence first deliveries of LNG from Qatar to the People’s Republic of China using Q-Flex vessels.

The State of Qatar is now the world’s largest LNG producer and anticipates that China will become one of the world’s largest gas markets.  Qatargas currently has executed long-term contracts to supply a total of  five mtpa of LNG to the People’s Republic of China."

http://www.qatargas.com.qa/print.aspx?id=173104

"QATARGAS TO INCREASE LNG SUPPLIES TO CNOOC


Signing of MoU between China's CNOOC and Qatargas on Nov. 9, 2009 in Beijing

Beijing, China, 13 November 2009: Qatargas Operating Company Ltd. (Qatargas) signed a Memorandum of Understanding (MOU) with China National Offshore Oil Company (CNOOC) for additional long-term supplies of LNG to the People’s Republic of China.

His Excellency Abdullah Bin Hamad Al-Attiyah, Deputy Prime Minister of The State of Qatar and the Minister of Energy and Industry who was in Beijing to attend the opening of Qatargas’ Representative Office in the People’s Republic of China witnessed the signing of the MOU by Mr. Fu Chengyu, President of CNOOC, and Mr. Faisal M. Al Suwaidi, Chairman and Chief Executive Officer of Qatargas.

Under the terms of the MOU, Qatargas intends to supply an additional three million tonnes of LNG per annum to CNOOC commencing in 2013.  In addition to this base volume, Qatargas and CNOOC will contemplate the sale and purchase of an additional two million tonnes per annum of LNG.

These volumes combined with an existing long-term supply commitment of two million tonnes of LNG agreed under a Sales and Purchase Agreement signed in 2008 will potentially take the total volume of the Qatari LNG to be supplied to CNOOC to seven million tonnes per annum.  As noted by His Excellency Abdullah Bin Hamad Al-Attiyah “China is the centre today of the new LNG compass”.

Mr. Faisal M. Al Suwaidi, Chairman and Chief Executive Officer of Qatargas, said: “I am extremely excited that we are able to announce the strengthening of our relationship with CNOOC on the same day we have celebrated the opening of our Representative Office in the People’s Republic of China.”

“Only last month we celebrated the arrival of Qatari LNG to China with CNOOC at an unloading ceremony held at the Dapeng Terminal, Guangdong Province.   This event marked the first time that one of Qatargas’
state-of-the-art Q-Flex LNG carriers delivered LNG to China and represented the beginning of long-term stable LNG supplies from the State of Qatar to the People’s Republic of China.

Mr. Fu Chengyu, President of CNOOC said, it’s another milestone in the expanding partnership between CNOOC and Qatargas, which will substantially help bring closer energy cooperation between the two countries. We are happy that CNOOC and Qatargas have built up mutual understanding and trust and we are confident to import more clean energy to fuel economic growth and improve environment in China.”

The State of Qatar is now the world’s largest LNG producer and anticipates that China will become one of the world’s largest gas markets."

Qatar to idle 66% of LNG capacity - Upstream Online

"Qatar to idle 66% of LNG capacity
News wires  10 June 2010 06:51 GMT

Qatar, the world’s largest producer of liquefied natural gas, will idle 66% of its export plants this year; reversing earlier plans and joining Russia in curtailing supply amid a global glut.


Go slow: Qatar is poised to idle 66% of its export capacity

Bloomberg cited a report from New York-based consultant Poten & Partners as saying Qatar’s two LNG projects, Ras Laffan and Qatar LNG, had an “unusually heavy” maintenance program during the past two months that shut six of 12 production units for several weeks. Another two units will undergo repairs this summer.

Qatar has changed its approach from a January comment by Faisal Suwadi, then chief executive officer of QatarGas, that his company probably would not idle any LNG units for maintenance this year.

Russian gas giant Gazprom, which supplies about a quarter of Europe’s gas, cut its 2010 production goal yesterday because of reduced demand.

Gazprom said it aims to produce 519.3 billion cubic metres of gas this year, scaling back an earlier forecast of 529 Bcm.

“Gazprom is now revising down figures because of a lack of demand,” head of the gas, condensate and oil production department Vsevolod Cherepanov, told reporters in Moscow.

Qatar’s decision to shut units even as it increases overall capacity underscores the challenge LNG producers face in balancing abundant supplies with long-term expectations of demand growth.

“There have been more shutdowns globally than we have seen in the past, and LNG units are being shut,” Andrew Pearson, an analyst at Edinburgh-based consultant Wood Mackenzie told Bloomberg.

“Suppliers are trying to support the market on one hand, but on the other hand, holding the gas back for future months and years when the price is more attractive.”

US gas futures slumped 31% during the first three months of the year, fluctuated near $4 per million British thermal units during April, then rose 19% since 24 May, to close at $4.677 yesterday on the New York Mercantile Exchange.

Gas for delivery in July 2011 was $5.384 per million Btu, a premium of 15% over the front-month contract. At the start of the year, the premium for July 2011 over gas for July this year stood at 6.6%.

Gas prices have fallen during the past year as more nations boost exports and the US, the world’s biggest consumer, increases domestic production from shale-gas deposits.

Prices are less than a third of the record $15.78 reached in December 2005, when cold weather drained inventories already depleted by earlier hurricane damage in the Gulf of Mexico.

Members of the Gas Exporting Countries Forum, which includes Russia, Iran and Qatar, failed to agree in April on an Algerian proposal to buttress prices by reducing spot sales. Qatari Minister of State for Energy Mohammed Sada said in March that his country did not plan to reduce output to support prices.

Published: 10 June 2010 06:51 GMT  | Last updated: 10 June 2010 06:51 GMT"