The most economically developed Yangtze River Delta region in China is also the regional market with the largest energy demand. The major target market for the West-East Gas Pipeline project, which has invested heavily, is the Yangtze River Delta region. According to sources from the National Development and Reform Commission's Energy Bureau in Shanghai recently, the Shanghai LNG project has been approved by the National Development and Reform Commission. The annual supply of LNG will be 3 million tons. It is expected to be completed by 2009 and it may increase to 6 million tons in the future. At the same time, the Zhejiang LNG project, which is also being submitted for approval, may have a slower construction process because it has not yet completed the government approval process. It is estimated that it can be built before 2010, and its annual design supply is also 3 million tons. In addition, the Shandong LNG project landing in Qingdao, Shandong, will also be put into production from 2007 to 2008, and the annual supply is also 3 million tons. It is understood that CNOOC will be responsible for the construction of LNG projects in Shanghai and Zhejiang, while the Shandong project will be led by the China Petrochemical Corporation. Yu Dehua, chairman of the China Petroleum and Petrochemical Engineering Research Association, said, “The Chinese government has decided to increase the use of natural gas, and the share of natural gas in primary energy will increase from the current level of less than 3% to 8% in 2010.†According to sources, due to the high natural gas prices, domestic natural gas supply is slightly higher than demand. However, in the next few years, with the expansion of the country’s support and application, there will be a situation in which demand exceeds supply. It is estimated that the domestic natural gas supply gap in 2010 will be 40-50 billion cubic meters, and nearly 100 billion cubic meters in 2020. These gaps will be mainly solved by foreign gas sources, including the construction of gas pipelines and LNG transportation. The pipeline gas currently being negotiated includes the Sino-Russian Far East gas pipeline and the Sino-Kazakh gas pipeline, with annual gas supply volumes of up to 30 billion cubic meters and 20 billion cubic meters respectively.
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