Broad approach boosts energy security
Source: www.chinamining.org Citation: Global Times Date: May 22, 2017
Experts on Sunday said that China`s efforts to achieve energy security have achieved preliminary success after the country received crude oil from the last of the four energy channels it has been building for years.
The first crude oil from Myanmar has reached China via the China-Myanmar crude oil pipeline, State-owned oil giant China National Petroleum Corp (CNPC) announced in a statement on its website on Friday.
The 1,420-kilometer cross-border pipeline, part of the China-Myanmar oil and gas pipeline project, starts near Kyaukpyu in Myanmar and enters China at the border city of Ruili, Southwest China`s Yunnan Province. The pipeline can carry 13 million tons of crude oil per year, according to CNPC.
Beyond the Myanmar pipeline, China has built up three other energy channels in recent years: the Sino-Russian pipeline passing through China`s Northeastern provinces, the traditional seaborne supply composed of ports and ships, and a pipeline that links Northwest China`s Xinjiang Uyghur Autonomous Region and Central Asian countries.
Also on Friday, local media in Northeast China`s Heilongjiang Province reported that China had received 100 million tons of crude from Russia via the Sino-Russian oil pipeline since 2011, citing customs data. The total value of the crude is $62.57 billion, and the shipments have generated 65.7 billion yuan ($9.54 billion) in tax revenue.
In the first three months of this year, the China-Kazakhstan pipeline pumped 1.53 million tons of crude into China, a statement on the website of the National Development and Reform Commission, the national economic planner, showed on February 27.
Dong Xiucheng, director of the China Oil & Gas Center with the China University of Petroleum, said that the latest developments show a national diversification strategy, which emphasizes establishing multiple sources of crude imports via multiple routes and directions, has achieved preliminary success.
Lin Boqiang, director of the Center for Energy Economics Research at Xiamen University, said that the functioning of all four energy channels is a milestone in China`s efforts to achieve energy security and a more diversified energy supply system.
"However, it is vital to continue to expand supply because China`s demand for oil has increased significantly from years ago when plans for the four channels were drawn up," Lin told the Global Times Sunday.
China`s crude imports in the first four months of this year stood at 139.12 million tons, up 12.5 percent year-on-year, according to customs data. In 2016, the nation imported 381 million tons of crude.
The regions these pipelines pass through will definitely benefit, as will related industries, noted Lin.
"The four channels could be expanded. For instance, a new one that starts in Iran, passing through Pakistan and entering China via Xinjiang, could be an addition to existing channels despite its high costs. Such projects won`t be based solely on economic reasons -- political factors will also weigh in," Dong told the Global Times on Sunday.
However, the completion of these infrastructure projects and the resulting gradual increase in oil imports won`t affect China`s energy restructuring strategy, which aims to curb coal consumption, stabilize crude use and increase the share of natural gas in the energy portfolio, Dong said. He said that overall oil consumption will still rise.
Lin said that "it is also important to make more effort to increase the turnover of the three overland channels and increase their proportion of the nation`s oil supply and reduce the over-reliance on seaborne oil supply."
"From a long-term perspective, it can be expected that having multiple oil supplies will help China obtaining more leverage in negotiating oil import prices," Lin said.
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