China, Kazakhstan Sign Accord to Expand Gas Pipeline Network

China, the world’s biggest energy user, signed an accord with Kazakhstan to expand the capacity of a pipeline network delivering natural gas from Central Asia by more than 80 percent.

The two governments agreed to build the Kazakh section of Pipeline “C” that will originate from Turkmenistan and cut through Uzbekistan, China National Petroleum Corp., the country’s biggest oil and gas producer, said in its online newsletter today. The link will flank two existing pipelines running through the three Central Asian nations.

China is turning to Central Asia for gas supplies to diversify fuel sources and to help cut the nation’s reliance on coal and oil. Turkmenistan started deliveries in December 2009 and is the only country transporting gas to China by pipeline.

The capacity of Pipeline “C” will rise to 25 billion cubic meters a year by December 2015, boosting the network’s capacity to 55 billion cubic meters, CNPC said.

Construction of the 1,305-kilometer (811 miles) Kazakh section will begin early next year and Pipeline “C” will be operational by January 2014 with an initial capacity of 15 billion cubic meters a year, CNPC said.

China and Uzbekistan agreed in April to expand the network’s capacity. The Central Asian nation, which straddles Turkmenistan and Kazakhstan, signed an accord with CNPC to deliver 10 billion cubic meters of gas a year, the Chinese company said in a statement in June last year.

China is also in talks with Russia for gas supply by pipeline. The negotiations have stalled over pricing disagreement.

--Chua Baizhen. Editors: Ryan Woo, Rebecca Keenan.

To contact the reporter on this story: Chua Baizhen in Beijing at bchua14@bloomberg.net

To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net.

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