(EnergyAsia, May 25 2012, Friday) — PetroChina will raise its natural gas purchases from Central Asia from 15.9 billion cubic metres (bcm) to as much as 25 bcm this year to help speed up China’s adoption of the clean-burning fuel as a substitute for coal, said chairman Jiang Jiemin.
Speaking to shareholders in Beijing earlier this week, Mr Jiang said PetroChina, which handles pipeline import of Central Asian gas into China, will be hit with increased losses from its natural gas business as it has no guarantee of being able to sell off the additional volume to customers even at heavily subsidised state-controlled prices.
The losses will mount next year as the CNPC subsidiary will have to handle another five bcm when the Central Asia pipeline delivering gas from Turkmenistan, Kazakhstan and Uzbekistan reaches capacity.
Despite its position as a profit-seeking company listed on the Hong Kong stock exchange, PetroChina will have to first meet its national service obligation to help the government double the share of natural gas in the country’s energy mix by 2020.
Mr Jiang acknowledged the loss being imposed on shareholders, specifically from the import of Central Asia gas starting with Turkmenistan in December 2009.
For the first quarter, PetroChina said it incurred a record loss of 10.2 billion yuan from selling imported natural gas and liquefied natural gas (LNG). (US$1=6.35 yuan).
It foresees more pain ahead as domestic natural gas sales are expected to continue growing at a rapid rate given the company’s heavy investment in developing new reserves, building pipelines and support infrastructure. Longer term, PetroChina is looking to develop the country’s massive shale and unconventional gas reserves, as well as acquire similar assets abroad.