Sinopec eyes Sakhalin gas reserves

China’s oil major Sinopec is looking at Sakhalin’s vast gas reserves as a source of liquefied natural gas for a possible third Chinese import terminal, company officials have said. Sinopec and domestic rival PetroChina, China’s largest oil and gas producer, want to carve out a spot in the country’s fledgling LNG business, officials at the two firms have said. But neither has put up any formal proposal to Beijing for a third terminal. The smallest oil firm, CNOOC, is the lead party in China’s first two LNG terminals in the provinces of Guangdong and Fujian, which will have a combined annual capacity of 6.3 million tons and are slated to start operation in 2006 and 2007, respectively. “Sinopec wants to be part of China’s natural gas development story. If we build China’s next import terminal, taking a stake in an overseas supply source will be our first priority,” the official said. LNG imports are part of China’s massive drive to jump-start its underdeveloped gas industry and replace polluting coal, which is dominant in the country’s energy mix. Natural gas current feeds only 3% of China’s energy needs.

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