China National Petroleum Corp., the nation’s biggest oil and gas producer, discovered a natural gas reserve big enough to supply China’s needs for almost two years.
The find in Anyue county in the southeastern province of Sichuan has a reserve of 440 billion cubic meters, of which 308 billion cubic meters are technically recoverable, CNPC said in a statement posted on its website yesterday.
China consumed 169 billion cubic meters of gas in 2013, according to the National Development and Reform Commission. The nation is seeking to boost the use of the cleaner-burning fuel to replace coal and tackle air pollution in its biggest cities including Beijing and Tianjin.
The Anyue gas field belongs to Southwest Oil & Gasfield Co., a unit of CNPC’s listed arm, PetroChina Co., according to an Aug. 28 statement posted on Suining city’s Environmental Protection Bureau’s website. Suining has jurisdiction over the area where most of the gas reserves were found.
The find is the single biggest gas discovery in China, and could boost PetroChina’s total proven gas reserves by as much as 10 percent, according to CLSA Ltd.’s energy analysts Simon Powell and Nelson Wang in an e-mailed research note today. The analysts said developing the field could take 3 to 5 years.
PetroChina shares rose 1.8 percent to HK$7.81 as of 10:21 a.m. in Hong Kong, the most since Nov. 19. The city’s benchmark Hang Seng Index gained 1 percent, while China Petroleum & Chemical Corp., the country’s no. 2 oil and gas producer, and Cnooc Ltd., its biggest offshore explorer, both rose 3 percent.
CLP Holdings Ltd., Hong Kong’s biggest power supplier, gained 2.9 percent to HK$59.75. CLP and PetroChina agreed in May to establish a joint venture to manage natural gas imports to Hong Kong, with PetroChina owning 60 percent.
The find is “a big boost to CNPC and PetroChina, as a new discovery of this scale can bring huge profits, once commercial production starts,” said Shi Yan, an analyst with UOB-Kay Hian Ltd. in Shanghai. “It will help strengthen China’s energy security as high output means less dependence on imports.”
China imported 53 billion cubic meters of natural gas in 2013, or 32 percent of its total consumption, according to CNPC’s research institute.
A testing well at the site has produced as much as 1.1 million cubic meters of natural gas a day, CNPC said in the statement. Production facilities being built at the site will help raise output to as much as 10 billion cubic meters of gas a year.
PetroChina produced 58 billion cubic meters of natural gas in the first nine months of 2013, according to its third-quarter earnings statement on Oct. 29. PetroChina spokesman Mao Zefeng couldn’t be reached for comment.
China had 3.1 trillion cubic meters of gas reserves at the end of 2012, enough for 28.9 years, according to BP Plc’s Statistical Review of World Energy released in June 2013.