Save for later Print Download Share LinkedIn Twitter Royal Dutch/Shell, Hong Kong and China Gas Co. (Towngas) and Hangzhou Gas Group signed an agreement Wednesday to jointly build and operate a high-pressure natural gas pipeline system in Hangzhou, 200 km southwest of Shanghai. Shell expects that some of the gas for the system will be sourced offshore eastern China and as cargo imports into a new LNG terminal, due to open in the first half of 2008 in Shanghai, in which China National Offshore Oil Corp. (CNOOC) will hold 45% (IOD Jan.7,p4). The bulk, however, is likely to come from the giant West-East pipeline, being built in stages by PetroChina, which will greatly increase natural gas supplies to the Shanghai region (IOD Mar.18,p2). The new Hangzhou joint venture involves the $91 million construction of a 117 km pipeline and two natural gas city gate stations. Work on the project started last year, with 18 km of pipe laid and the first city gate station opened. Overall completion is due in 2008, and by 2010 it should operate at 600 MMcm/yr (58 MMcf/d), compared with today's 55 MMcm/yr. Hangzhou Gas will take a 51% stake in the new venture, while Shell will hold 39% and Towngas 10%. Hong Kong-listed Towngas, founded in 1862, supplies manufactured gas to 1.5 million customers in Hong Kong through a 3,000 km distribution system, which reaches 85% of that city's households. Over the past 10 years, it has also expanded in mainland China.
