PetroChina

The construction of the West–East Gas Pipeline started in 2002. The pipeline was put into trial operation on 1 October 2004, and the full commercial supply of natural gas commenced on 1 January 2005. The pipeline is owned and operated by PetroChina West–East Gas Pipeline Company, a subsidiary of PetroChina. Originally, it was agreed that PetroChina would have owned 50% of the pipeline, while Royal Dutch Shell, Gazprom, and ExxonMobil had been slated to hold 15% each, and Sinopec 5%. However, in August 2004, the Board of Directors of PetroChina announced that following good faith discussions with all parties to the Joint Venture Framework Agreement, the parties had not been able to reach an agreement, and the joint venture framework agreement was terminated.[27]

The 4,000 kilometres (2,500 mi) long pipeline runs from Lunnan in Xinjiang to Shanghai.[28] The pipeline passes through 66 cities in the 10 provinces in China.[29] Natural gas transported by the pipeline is used for electricity production in the Yangtze River Delta area. There is a plan to replace coal with gas in Shanghai by 2010. The capacity of the pipeline is 12 billion cubic metres (420 billion cubic feet) of natural gas annually.[30] The cost of the pipeline was US$5.7 billion. By the end of 2007, the capacity was planned to be upgraded to 17 billion cubic metres (600 billion cubic feet). For this purpose, ten new gas compressor stations will be built and eight existing stations are to be upgraded.[31]

The West–East Gas Pipeline is connected to the Shaan-Jing pipeline by three branch pipelines.[32] The 886 kilometres (551 mi) long Ji-Ning branch between the Qingshan Distributing Station and the Anping Distributing Station became operational on 30 December 2005.

The pipeline is supplied from the Tarim Basin oil and gas fields in Xinjiang province. The Changqing gas area in Shaanxi province is a secondary gas source. In the future, the planned Kazakhstan-China gas pipeline will be connected to the West–East Gas Pipeline.

Starting from 15 September 2009, the pipeline is also supplied with coalbed methane from the Qinshui Basin in Shanxi.[33]

Construction of the second West–East Gas Pipeline started on 22 February 2008. The pipeline with a total length of 9,102 kilometres (5,656 mi), including 4,843 kilometres (3,009 mi) of the main line and eight sub-lines, will run from Khorgas in northwestern Xinjiang to Guangzhou in Guangdong. Up to Gansu, it will be parallel and interconnected with the first west–east pipeline. The western part of the pipeline is expected to be commissioned by 2009, and the eastern part by June 2011.[34]

The capacity of the second pipeline is 30 billion cubic metres (1.1 trillion cubic feet) of natural gas per year. It is mainly supplied by the Central Asia-China gas pipeline. The pipeline is expected to cost US$20 billion.[34][35] The project is developed by China National Oil and Gas Exploration and Development Corp. (CNODC), a joint venture of China National Petroleum Corporation and PetroChina.[36]

Construction of the third pipeline started in October 2012 and it is to be completed by 2015. The third pipeline will run from Horgos in western Xinjiang to Fuzhou in Fujian.[37] It will cross Xinjiang, Gansu, Ningxia, Shaanxi, Henan, Hubei, Hunan, Jiangxi, Fujian, and Guangdong provinces.

The total length of the third pipeline is 7,378 kilometres (4,584 mi), including 5,220-kilometre (3,240 mi) trunkline and eight branches. In addition, the project includes three gas storages and a LNG plant. It will have a capacity of 30 billion cubic metres (1.1 trillion cubic feet) of natural gas per year with operating pressure of 10–12 megapascals (1,500–1,700 psi). The pipeline will be supplied from Central Asia–China gas pipeline's Line C supplemented by supplies from the Tarim basin and coalbed methane in Xinjiang. Compressors for the pipeline are supplied by Rolls-Royce.[38]

PetroChina had a chemical spill in November, 2005. One of its chemical plants exploded in Jilin, China, resulting in 100 tons of benzene, which is a carcinogen and toxic, pouring into the Songhua River. There was a slick of chemicals that spanned 80 kilometres.[40] Harbin, which is another city along the Songhua River, had to cut the water supply from almost 4 million people, for 5 days. More than 60 people were injured, five died, and one person was missing due to the incident. The spill prompted China's environmental agency to fine the company one million yuan (approximately $125,000, £64,000) for its pollution, which was the maximum fine that can be handed out in China for breaking an environmental law.[41] However, this disaster sparked controversy about this law. People claimed the law was too soft.[42] The spill even crept into Khabarovsk, Russia, where residents stocked up on bottled water. The city tried filtering its water of toxic substances, but officials were still unsure if the water was 100% safe for drinking.[43] The Chinese government said it will take more than one billion dollars to clean up the aftermath.[40] Li Zhaoxing, Chinese Foreign Minister at the time, issued a public apology to Russia due to the incident.[44]

In 2014, Petrochina's subsidiary Lanzhou Petrochemical was responsible for ethylene and ammonia leaks, benzene contamination of water supplies, and air pollution in Lanzhou. The city government criticized the company and demanded an apology. [45]

A PetroChina gas station in Xinjiang

Another major controversial issue is PetroChina's development in gas reserves in Tarim Basins, Xinjiang. It is argued that such a project might pose a threat to the environment, as the construction of the pipeline might affect the wildlife in the regions where it runs through. However, no known environmental or social impact assessments have been conducted, as the environmental record of Tarim Basins is very poor.[46]

Approved in 2007, a $5.5 billion petrochemical plant, expected to produce 800,000 tons of ethylene and refine 10 million tons of crude oil a year, is now under construction by PetroChina in Chengdu, provincial capital of Sichuan in Southwestern China. Ethylene is widely used in the production of goods such as packaging and trash liners. Although the project claimed that $565 million of the total investment would be dedicated to environmental protection, residents of Chengdu who believe it might bring pollution to the local area took to the streets on May 3 and 4, 2008, to protest against the project. The whole demonstration was peaceful, and presence of Chinese government intervention was scarce.[47]

• 2004 Annual Report, pp. 135, 137
• McGregor, Richard. The Party: The Secret World of China's Communist Rulers. Harper Perennial: New York, 2012. ISBN 978-0-06-170876-3. Originally published in 2010 by Allen Lane, a Penguin Books imprint.