Pollution pressures China to go for gas

SYDNEY, Australia (CNN) - A serious urban pollution problem is forcing China to move rapidly on natural gas development.

"While coal is still the dominant fuel, especially for power generation," says Deutsche Bank energy analyst, Huw Williams," the pressure to develop the natural gas sector is increasing."

Williams says demand for gas is coming from Beijing and the fastest growing regions on China's east coast.

Ordos Basin can supply Beijing for up to 30 years

The Ordos Basin, in China's south, is seen as a key long-term supplier.

According to the Beijing Youth Daily the Ordos Basin holds gas with a reserve capacity of 100 billion cubic meters that can "stably and safely supply Beijing with gas for 20 to 30 years".

The Canadian exploration company, Drucker Inc, also confirms China's vast petroleum and gas resources.

It says China ranks fifth in the world for oil production, with proven reserves of 24 billion barrels of oil -- 94 percent of which are onshore.

According to Drucker Inc, the Ordos Basin alone holds 2 percent of China's onshore recoverable reserves.

Along with the Ordos Basin, Williams also cites offshore developments in the South China Sea, East China Sea and Bohai Bay as major suppliers for liquefied natural gas (LNG) projects.

"LNG is expected to be a key element of future supply," says Williams, "with the first project now underway in Guangdong province."

"Another three plants are planned. If Guangdong is a success Shanghai is likely to be next."

Beijing Youth Daily
Drucker Inc
Guangdong Province Home site

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