Sinopec 2010 gas output may rise more than 50%

SHANGHAI (Bloomberg) -- China Petroleum & Chemical Corp., the country’s largest oil refiner, may increase natural gas production by more than 50 percent to meet the nation’s demand for the cleaner-burning fuel.

Output may rise to 12-13 billion cubic meters next year from about 8 billion cubic meters in 2009, Xie Dan, the vice president of the company’s gas unit, said at an industry conference in Shanghai on Tuesday.

China, the world’s second-largest energy user, aims to expand gas consumption to 10 percent of its total energy use by 2020 from about 3 percent now to cut reliance on oil and coal.

The output increase will be mainly because of the startup of Puguang gas field in Sichuan province, Xie said.

Sinopec, as China Petroleum is known, commenced operations at the field on Oct. 10, the Hong Kong-listed company said last month. Puguang may produce 4 billion cubic meters next year and 8 billion cubic meters in 2011, Sinopec said then.

To meet gas demand, Chinese oil companies are also in the process of building or planning more than 10 liquefied natural gas terminals to import the fuel.

The terminal that Sinopec is planning in Qingdao city in the eastern province of Shandong is awaiting approval from the central government, Xie said. It is scheduled to become operational in 2013, he said.

Sinopec will buy 2 million metric tons of LNG a year from an Exxon Mobil Corp.-led project in Papua New Guinea to supply the terminal, the Irving, Texas-based company said this month.

Sinopec also plans to build a terminal in Beihai city in the southern province of Guangxi, Xie said. It will have an annual receiving capacity of 3 million tons, he said, without elaborating.

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