BEIJING, Sept. 7 -- To satisfy the ever-growing demand for natural gas, China National Petroleum Corp (CNPC) plans to invest 4.3 billion yuan (US$540 million) to enhance the capacity of the West-East Gas Pipeline.

The pipeline's capacity will be increased from 12 billion cubic metres (bcm) to 17 bcm per year.

The capacity-boosting project will raise the number of pumping stations along the line from the current 10 to 22. Most of the existing facilities will also be expanded, said CNPC, China's top oil and gas producer.

As parent company of overseas-listed PetroChina, CNPC contributed 70 per cent of China's 50 bcm natural gas production last year.

The capacity enhancing project has already started and by the end of the year six new pumping stations will be completed and the pipeline's capacity will be increased to 15 bcm.

Experts predict that given China's rapid economic development, the demand for natural gas will continue to rise, reaching 30 bcm next year. And the current capacity of the West-East Gas Pipeline will not be sufficient to meet the requirement.

"It is an unavoidable trend for the capacity of West-East Gas Pipeline to be enhanced. The country's thirst for cheap natural gas will definitely grow as the oil price keeps surging and environmental concerns prevail," an analyst commented.

The expert is confident that with China hammering out more gas import deals with Russia and locating more domestic gas resources, supplies for the added capacity of the pipeline are guaranteed.

CNPC is close to sealing a deal with Moscow-based Gazprom to build two pipelines to transport up to 68 bcm gas from Russia to China annually. The western line, from Russia's West Siberia to China's Xinjiang Uygur Autonomous Region will reportedly connect with the West-East Gas Pipeline.

China is committed to raising the ratio of natural gas in its total energy consumption from the current 3 to 5 per cent to between 8 and 10 per cent by 2010.

The West-East Gas Pipeline pipes natural gas from resource-rich western China to the energy-thirsty east.

(Source: China Daily)