China Petroleum and Chemical Corporation (SNP), or Sinopec, has started a processing plant in southwest China that treats high-sulphur natural gas pumping from a new field at Yuanba. Sinopec is China's second-largest energy major.
Located in China's top gas producing province of Sichuan, Yuanba will have the capability to produce 3.4 billion cubic metres (bcm) of gas a year by end of 2015, twice from the current yield of 1.7 bcm per year.
The news of the start-up of the new gas field is followed by Sinopec’s announcement that it would increase its winter gas supplies to domestic users by 11% to meet the growing demand for heating.
Spread over an area of 3,200 square kilometers and covering the cities of Guangyuan, Nanchong and Bazhong, Yuanba field has a proven reserve of 219.4 bcm. The gas reservoir with an average depth of 6,700 meters is among the deepest in Chinese conventional gas deposits.
Sinopec’s $10 billion Puguang venture was its first major high-sulphur gas development project, while Yuanba is the company’s second major development.
The majority of Yuanba’s gas will be transported through a pipeline to central and east China once it is fully operational.
Sinopec has stated that it expects its total gas output to increase by 8% to 20 bcm in 2014. The world's highest energy user and the third-largest consumer of gas, China, is competing to unlock supplies of the cleaner-burning fuel by enhancing imports and by domestic exploration of both conventional and unconventional reserves.
Sinopec is one of the largest petroleum and petrochemical companies in Asia. The company is the second largest crude oil and natural gas producer, and the largest refiner and marketer of refined petroleum products in China. It is also the largest producer and distributor of petrochemicals in the nation.
Sinopec carries a Zacks Rank #5 (Strong Sell). Better-stocks which sport a Zacks Rank #1 (Strong Buy) include Spectra Energy Partners, LP (SEP), Seadrill Partners LLC (SDLP) and Sandridge Mississippian Trust II (SDR).
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