CPC to Build Eight Tanks to Store Natural Gas

Taipei, Jan. 5, 2006 (CENS)--To tightly grasp the massive business opportunity from the increased demand for natural gas, the state-run Chinese Petroleum Corp. (CPC) will invest NT$48 billion (US$1.46 billion at US$1:NT$32.8) to build eight natural gas storage tanks at Yungan of Kaohisung County, southern Taiwan and Taichung Port, central Taiwan.

The growth of demand for natural gas is triggered by the Kyoto Protocol requesting abatement in emission of carbon dioxide (CO2).

CPC saw its annual sales hit a historic high of NT$650 billion (US$19.81 billion) in 2005, and has projected to score NT$17.2 billion (US$524.39 million) in pretax earnings in 2006.

B.L. Chen, president of CPC, noted his company is faced with a great challenge in sales due partly to the downturn of the global petrochemical industry and partly to the international crude oil price lingering at a high of US$60 a barrel.

According to a survey conducted by the CPC, Taiwan currently demands 7.3 million metric tons of natural gas per year. It is estimated the demand would reach between 18 million and 20 million metric tons in 2020, and the amount would increase to between 20 million and 22 million metric tons in 2025. To meet the increased demand for natural gas, said Chen, CPC has resolved to set up storage tanks and secure safety inventory of the product.

Although Taiwan is not a signatory to the Kyoto Protocol signed by 38 nations, Chen noted, seven major domestic industries, including petrochemical, have promised to reduce emission of CO2. CPC has promised to cut emission of CO2 by 10%, or one million metric tons, from the present level.

Chen said the seven major industries have step by step increased the consumption of natural gas to replace fuel oil, which has brought in massive business opportunity for CPC, currently a major supplier of the product in Taiwan.