PetroChina has discovered another major gasfield in western Xinjiang, a source from the company's Tarim unit confirmed Wednesday.
"The gasfield, known as Dabei III, boasts an estimated reserve of as much as 130 billion cubic meters, and will serve as an important backup supply source for the west-east gas pipelines," he said on condition of anonymity.
PetroChina's Beijing office declined to comment but Xinhua quoted officials in the Xinjiang Uygur Autonomous Region as saying the Hong Kong and New York-listed giant had discovered 130 billion cu m of natural gas.
The discovery has the potential to be the third largest gas field in Xinjiang, after Kela II and Dina II Gas fields, said Dai Jinxin, a researcher with the Research Institute of Petroleum Exploration and Development affiliated with PetroChina, the country's largest oil and gas producer.
"Gas fields with reserves of more than 100 billion cu m are considered giant gas fields even globally," Dai said.
Kela II and Dina II gas fields have proven reserves of 250 and 170 billion cu m.
Since more exploration and evaluation are needed at the new field, it is too early to give any specific figures, the source added.
"We will drill more appraisal wells to determine the final reserve at a cost of around 200 million yuan ($26.6 million)," the insider said. The field has an initial estimated daily output capacity of 286,000 cu m.
Although Xinjiang currently lags Sichuan Province in terms of annual natural gas production, the autonomous region has more reserves, Dai said.
Reserves in Xinjiang's Tarim Basin are expected to hit around 8 trillion cu m, compared with the Sichuan Basin's 4 trillion cu m, Dai told China Daily.
Xinjiang produced about 8 billion cu m of natural gas last year, while Sichuan's output was 15 billion cu m.
"Given that the transportation capacity of the west-east gas pipeline will increase this year and a second pipeline is being planned, the discovery in Xinjiang may turn out to be a shot in the arm to the country's natural gas industry," said Dai.
The first pipeline runs 4,000 km and has a capacity to pump 12 billion cu m of natural gas annually from the Tarim Basin to Shanghai. It began commercial operation in 2004 and the transmission capacity is set to be raised to 14 billion cu m this year.
China National Petroleum Corporation, PetroChina's parent company, is planning the second west-east gas pipeline with an annual transmission volume of 30 billion cu m, on which construction will start next year.
The pipeline will transport gas from central Asian countries - including Turkmenistan - and Xinjiang to energy-thirsty eastern and southern China, including Shanghai and Guangdong Province.
According to BP energy statistics for 2006, coal accounted for 70 percent of China's total primary energy consumption; oil, 20.6 percent; natural gas, 2.9 percent; hydropower, 5.6 percent; and nuclear power, 0.7 percent.
The country plans to increase gas use to 5.3 percent of the country's total energy mix by 2010, according to the National Development and Reform Commission, the top economic planner.