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CNPC starts building Niger-Benin oil pipeline
PIPELINES & TRANSPORT
CHINA National Petroleum Corp. (CNPC) is working to establish a new transportation route that will allow it to export the oil it pro- duces in Niger.
China National Oil and Gas Exploration and Development Corp. (CNOGEDC), a subsidiary of state-owned CNPC, began work last week on a 90,000 barrel per day (bpd) pipeline connecting the Agadem oilfield in Niger to south-eastern Benin, according to the press office of Nigerien President Mahamadou Issoufou. It marked the start of construction in a ceremony at the Aga- dem field, with President Issoufou attending.
When finished, the pipeline will follow a 2,000-km route from south-eastern Niger to Seme, a port near the border between Benin and Nigeria. The Benin section of the link will be 687 km long. CNPC will have to spend $4.5bn to build the pipeline, which is due to be completed by the end of 2021.
CNPC began extracting crude oil from Aga- dem in 2011. In 2015, members of Boko Haram, a Nigerian Islamist group, began staging attacks
on the field and other oil infrastructure in the Diffa region of south-eastern Niger. Concerns about security came to a head last November, after Boko Haram crossed the border into Niger and killed eight members of a drilling team employed by the French company Foraco.
Niger’s government responded quickly, ini- tialing an agreement with Benin in January 2019 on the construction of a new pipeline to Seme. CNPC then concluded a deal on September 15, when Nigerien Oil Minister Foumakoye Gado and CNOGEDC’s president Wang Zhong Cai signed an agreement on the project in Niamey.
The Chinese company had been consid- ering an alternative export route – namely, a shorter and cheaper pipeline through Chad and Cameroon that would have terminated in the deepwater port of Kribi. It even signed an agreement with the government of Cam- eroon on this project in 2013. The parties never launched construction, however, largely because of tensions between CNPC and the government of Chad.
China reveals state of oil reserves
POLICY
CHINA’S National Energy Administration (NEA) has given its first official update on the country’s strategic oil inventories in almost two years.
The country has around 80 days of oil stored at its strategic petroleum reserve (SPR) as well as in state and commercial stockpiles, Reuters quoted the NEA’s head of development and plan- ning, Li Fulong, as telling a news conference on September 20. China imported an average of 9.9mn barrels per day in the first eight months of the year, suggesting that there are around 792mn barrels in storage.
The country’s last update focusing on the SPR alone was in December 2017, when the National Bureau of Statistics (NBS) revealed that crude volumes had reached 37.73mn tonnes (276.56mn barrels) as of mid-2017. This was equivalent to around 30 days’ worth of imports, which averaged 8.48mn bpd in 2017.
Li added that the second phase of the SPR would be finished in 2020. The central govern- ment said in July 2017 that it planned to acceler- ate construction of the second phase and bring forward the third phase. There has been no update on when work is likely to begin on the third phase.
The NEA’s announcement comes as China seeks to quell speculation that it is more exposed than most to rising tensions in the Middle East, following the recent attacks on key Saudi Ara- bian oil production facilities.
Reuters quoted NEA director Zhang Jianhua as saying: “It is not that we depend on one certain country or region. Looking at the current situa- tion, even if Saudi Arabia is attacked, it will not affect China’s crude oil supply.”
Zhang added that China could “import large amounts of oil and gas” from the US if the trade war were resolved. The two countries’ trade dispute continues despite several rounds of talks aimed at finding common ground. In New York this week, Chinese State Councillor and Foreign Minister Wang Yi urged the US to drop its trade tariffs.
“While China opens wider to the US and the rest of the world, we expect the US to do the same to China and remove all unreasonable restric- tions,” Wang said. “In a word, China’s efforts and achievements of reform and opening up in the past several decades have been widely recog- nised. They should not be deliberately ignored or denied.”
Week 38 25•September•2019 w w w . N E W S B A S E . c o m P13
