PetroChina eyes third west-east gas pipeline -source

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BEIJING, Nov 20 (Reuters) China's top oil and gas firm, PetroChina, is drafting plans for a third west-east pipeline to carry Russian and domestic gas to the country's booming east, a company source said.

The plans are in a preliminary stage, with no on-site investigations yet carried out, but they envisage a route from the Altai area to the Bohai bay area on China's eastern region -- where the capital Beijing is situated, the source said.

The listed unit of state-owned CNPC already operates the first flagship west-east pipeline connecting gas fields in the Xinjiang region with the financial hub of Shanghai.

Work is also about to start on a second pipeline, to carry Turkmen gas to the Pearl River Delta, China's southeastern export hub.

''The third line will likely be formally proposed soon after the full start of the construction of the second line early next year,'' the source said.

The trunk line would be an estimated 6,000 kilometres long and at least 1 metre in diameter, the source said, although branch lines could bring the total length to 8,000 km. A highly developed pipeline network around Beijing means gas could also be fed south once it reached the Bohai area, he added.

China, the world's number-two energy user which is keen to boost use of clean burning gas, is pushing its firms to step up domestic exploration and courting nearby gas-rich nations from Myanmar to Turkmenistan to secure imports.

The framework study for the newest pipeline will be finished early next year, setting the stage for a feasibility study, the source added.

Work on the line would progress faster if Russia and China can agree on terms for planned sales of up to 80 billion cubic metres of gas a year, the source said.

Beijing and Moscow agreed last year to deliver the imports through two pipelines travelling on either side of Mongolia, but negotiations have since dragged on because of disagreements about how much the gas should cost.

China's official Xinhua agency reported at the weekend that the two sides had reached consensus on a pricing mechanism, citing the deputy chairman of Russian monopoly gas exporter Gazprom, Alexander Medvedev.

But there has been no official announcement of a deal.

REUTERS BJR DB1111

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