PetroChina restores a third of halted Sichuan gas
May 17, 2008 - 0:0
BEIJING (Reuters) - PetroChina, the main energy supplier in China’s Sichuan, said on Thursday that it had restored about one-third of the natural gas output it had halted after Monday’s quake, but that oil supplies were running short.
The firm had to cut production of about 6 million cubic meters of natural gas per day after Beijing ordered the precautionary closure of all mines and fields in the region, which accounts for more than 20 percent of China’s gas output.Fuel stocks in the area have drawn down after a major oil pipeline, linking Lanzhou city in the northwest with Sichuan’s capital Chengdu and Chonging, was still pumping at less than capacity after resuming operations a day after the quake.
“Gasoline stocks in Sichuan are only enough for five days and diesel only enough for three days,” PetroChina President Jiang Jiemin told reporters on sidelines of the company’s annual shareholders’ meeting.
Jiang said the firm planned to import a total of 1.5 million tonnes of refined fuel in the second quarter to boost national stocks, and an industry paper reported on Wednesday it had sent 100,000 tonnes of emergency fuel supplies to the region.
A PetroChina trader said PetroChina’s imports included both gasoline and diesel, and that the firm had already secured almost all of them from the international market.
The earthquake also damaged some power facilities, but industry official say it is unlikely to lead to a sustained increase in fuel demand for power generators or other use as Sichuan is largely a rural economy and a small oil consumer.
Damaged rail lines also hampered fuel delivery into Sichuan.
The 7.9-magnitude quake, the worst in three decades, damaged many dams and triggered landslides that cut off rivers. To limit casualties, Beijing on Tuesday ordered the shutdown of mines, chemical plants, oil and gas wells in the stricken areas.
Chinese state oil companies have been stepping up fuel imports to stockpile ahead of the summer Olympics.
Some 728 petrol stations were affected by the quake and 78 were forced to shut down, Jiang said.
PetroChina, hurt by heavy refining losses because it cannot pass on crude costs, saw little chance that the government might raise pump rates in the near term, said Jiang, because it could worsen inflation already at its highest in nearly 12 years.
But the firm has appealed to the government to revise a windfall tax on crude -- by raising the start point of the levy from $40 a barrel -- to help alleviate losses at its refining division, he said.
China has kept its domestic fuel prices unchanged since last November when U.S. crude was around $94. Crude has rallied 30 percent this year to hit a record high near $127 earlier this week. From April, PetroChina will receive monthly government subsidies to compensate losses from refining.