OREANDA-NEWS. August 18, 2011. China's Sinopec Corp plans to build 3.4 billion cubic metres of natural gas processing capacity by 2015 at the new Yuanba field in the country's southwest, about one-third short of an earlier target.China Petrochemical News, the state energy firm's in-house newspaper, reported that Sinopec plans 1.7 billion cubic meters of gas processing capacity at Yuanba field in Sichuan province by the end of 2013, to be doubled to 3.4 bcm by end of 2015.

Senior Sinopec officials said late last year that the company aimed for 6 bcm of production capacity at Yuanba by the end of 2015. That would put it second to its top gas producer Pugang, which has annual production capacity of 12 bcm and is now pumping gas to the east coast.

A company media official told Reuters on Tuesday that the scaleback in the production target was due to a review of the resource base and had nothing to do with natural gas prices, which the government has kept below import costs.

"The revision has some link with the resource amount, but has nothing to do with natural gas prices," said the Sichuan-based official.

A gas processing, or purifying plant strips off toxic hydrogen sulphide from natural gas pumped from wells in addition to carbon dioxide. Gas fields in the resource-rich Sichuan basic have a notoriously high content of hydrogen sulphide.

A 3.4 bcm processing plant roughly equals 4 bcm gas production capacity at the well head, according to estimates from an expert in gas processing. That means Sinopec has cut back the production target for Yuanba by about one third.

China is aggressively boosting use of the lower-carbon fuel to make it supply 10 percent of its energy needs by 2020, almost tripling the current consumption, but a lagging domestic gas pricing system could deter exploration and production.

The Sinopec paper also said the main gas reservoirs of Yuanba are more than 7,000 metre deep and are geographically difficult to develop.

Sinopec started exploring the 3,200 square kilometre Yuanba block in 2006.