OREANDA-NEWS. September 17, 2012. China National Petroleum Corp. (CNPC) has completed construction of a 30 billion cubic meter per year (bcm/y) pipeline that will transmit output from coal-to-gas (CTG) projects in the Xinjiang Uyghur Autonomous Region, local media reported.

The pipeline will pump synthetic natural gas (SNG) from the Ili Kazakh Autonomous Prefecture to Khorgas city on China’s border with Kazakhstan, where CNPC’s 3rd West-East Gas Pipeline begins, according to a report by news website iyaxin.com.

CNPC broke ground on construction of the 64-kilometer project in May last year, investing some RMB 996 million (USD 157.06 million) in the project, the report said.

The Xinjiang regional government has endorsed seven CTG projects in the prefecture’s Ili valley, which contains 60 billion tons of proven coal reserves. The projects require combined investment of RMB 160 billion (USD 25.23 billion) and are capable of producing an aggregate 33 bcm/y.

Xinjiang is exempt from a directive issued by the National Development and Reform Commission in March last year that gave the top economic planning agency final construction approval over CTG projects in China, according to Bill Zheng, an analyst with industry consultancy AsiaChem Consulting.

“Xinjiang is the exception. The local government has the right to approve projects,” Zheng told.

“In the Ili valley, phase one of Shandong Energy Xinwen Group’s two bcm/y facility and China Kingho Energy Group’s 5.5 bcm/y development will come onstream in two years, while two projects by China Power Investment Corp. will start operations in five years,” Zheng said.

Shandong Energy’s venture is located in the prefecture’s Yining City and will require investment of RMB 12 billion (USD 1.9 billion).

Outside of the Ili valley, four additional coal gasification facilities are listed as key projects by the Xinjiang branch of the NDRC, namely a 6 bcm/y development by China Huadian Corp. and three 4 bcm/y projects planned by China Huaneng Group, Longyu Energy Zhundong Coal Chemical and China National Coal Group Corp.

Xinjiang has more than 30 CTG projects planned or under construction that are capable of producing at least 150 bcm/y.

CNPC has inked agreements with 12 companies and will transport 79.5 bcm/y of the total output, while two long-distance pipelines planned by China Petrochemical Corp. (Sinopec Group) will carry 60 bcm/y, Xinjiang Economic News reported on Wednesday last week.

Nine companies, including Huadian and Huaneng, agreed to supply Sinopec Group’s two pipelines with SNG in January.