Construction of First Gas Storage Cluster Begins in Western China

The construction of China's first natural gas storage cluster has begun in the west of the country, with total investment reaching 7 billion yuan ($990 million). The project is expected to promote the safety of natural gas pipelines in the region.

The cluster includes three storage tanks in Shanshan County, Northwest China's Xinjiang Uygur Autonomous Region, the China National Petroleum Corporation said on Sunday. It said the designed natural gas storage capacity totals 5.6 billion cubic meters, with load level reaching 2 billion cubic meters.

Natural gas storage facilities are similar to grain warehouses, and are used to store excess gas during periods of low demand and to supplement market supply during periods of high demand. This is also called load leveling.

China had already constructed 27 natural gas tanks but the country's load leveling capacity stood at a little more than 12 billion cubic meters, accounting for less than 4 percent of the country's annual natural gas consumption, media reports said. That is far below the international standard of 12-15 percent.

Against this backdrop, China's National Development and Reform Commission issued a document on April 10 to further level up infrastructure construction and the country's natural gas storage capacity.

The guideline urged the improvement of operating modes and channels for investment returns in the sector and prompted infrastructure connectivity and opening-up, including liquefied natural gas (LNG) pipeline networks and receiving stations.

Preferential land, financial, tax and investment policies will be implemented to facilitate the expansion of China's natural gas storage capacity, it said.

As China is calling for the use of clean energy, its consumption of natural gas has maintained a growth trend in recent years. Data from the National Bureau of Statics showed that the country's natural gas consumption rose 9.4 percent year-on-year to 306.7 billion cubic meters in 2019.

The country's natural gas output increased 10 percent year-on-year to 176.2 billion cubic meters in 2019, meaning an increased storage capacity is now a necessity.