Securing China's Energy Future

SHANGHAI: A significant reduction in the level of pollution is expected here soon as a "clean-burning hydrocarbon fuel" will be used to power the city's buses starting next month, Shanghai's communication department said.

Ten buses fueled by Dimethyl ether (DME) will start serving the city's No 147 line, running between Hongkou and Yangpu districts from next month, according to a report in the Shanghai Morning Post.

It is expected that the new fuel, which is 10 percent cheaper than diesel oil, will discharge less waste, it said.

As a diesel fuel replacement, DME is a completely sootless synthetic fuel that can be produced from coal, natural gas or biomass, and meets the stringent emission regulations in Europe and Japan.

It also features high cetane, which causes less delay between the start of injection and combustion.

According to Shanghai Urban Construction and Communications Committee, clean and energy-efficient buses are being developed to make the city "greener".

As of now, there are 17 electric-powered buses and 10 mixedly powered ones in operation, said Huang Xiaoyong, an official with the committee. "There are 281 buses powered by natural gas," he added.

Vehicle waste has become a major source of pollution in the city, contributing 80 percent of the air pollution downtown. There are more than 2.5 million vehicles in Shanghai.

In 2007, the Shanghai Municipal People's Congress passed a bill banning vehicles that emit black exhaust. According to the bill, drivers of vehicles emitting black fumes can have their licenses confiscated.

(China Daily 02/17/2009 page4)

China studies using forex reserves to buy overseas resources


China is considering using part of its huge foreign exchange reserves to set up a fund for overseas energy exploration and acquisitions as part of a state plan to encourage offshore expansion, the nation's top oil producer said yesterday.

China will also offer subsidies and capital injection to firms which make overseas oil investments, China National Petroleum Corp said on its Website, citing a three-year state energy plan.

It has been long suggested by experts that China tap its US$1.95 trillion reserves, the world's biggest, to buy resources abroad. CNPC's remark coincided with an article in Outlook, Xinhua's weekly magazine, published yesterday.

"It's foreseeable that China's economic growth would remain fast over a very long period, which means it has to increasingly rely on external resources. (China) should take advantage of the current weak commodity prices in global markets by boosting certain strategic resource imports and converting some capital reserves into resources reserves," Outlook said in the article on how China could make better use of its forex reserves.

Crude oil price has tumbled over 70 percent from the all-time high of US$147.27 a barrel in July last year.

China aims to boost crude oil production to 192 million tons and natural gas output to 86 billion cubic meters in 2009, up 1.2 percent and 13 percent, respectively from 2008, CNPC said. The government has also set 2010 and 2011 targets of 196 million tons and 198 million tons for crude, and 105 billion and 120 billion cubic meters for gas, it said.

China also targets a total refining capacity of 440 million tons by 2011, CNPC said. It would push forward joint-venture refinery projects with companies from Venezuela, Qatar and Russia which could supply crude.

China processed 342 million tons of crude in 2008, with an estimated capacity of 396 million tons.

There are also plans to build liquefied natural gas receiving terminals in Qingdao, Ningbo, Tangshan and Zhuhai, and boost the capacity of the strategic petroleum reserves to 44.6 million cubic meters, according to CNPC.

(Shanghai Daily February 17, 2009)

Russia's Transneft plans to start on Chinese pipeline leg in 2010
20:30 | 17/02/2009

MOSCOW, February 17 (RIA Novosti) - Transneft plans to start building a Chinese leg of the East Siberia-Pacific Ocean later in 2009 and to commission it in 2010, Russia's monopoly pipeline operator said in a statement on Tuesday.

Under an agreement signed between Russia and China in Beijing earlier in the day, a branch of the ESPO oil pipeline will be built toward China and Russia will supply China with 15 million metric tons (110 million barrels) of crude annually for 20 years.

"The construction of the leg should be synchronized with the construction of the first line of the ESPO pipeline," the statement quoted the company's vice president, Mikhail Barkov, as saying.

The pipeline's first leg was launched in October 2008 in the reverse direction, running westwards. The construction of the pipeline, designed to bring Russian oil to the lucrative Asia-Pacific market, is due to be completed later this year, which will enable ESPO to pump its first oil eastwards.

Barkov also said that China's $10 billion loan to Transeft would primarily be invested in the construction of the Chinese leg.

"In addition, there are projects that will contribute to the functioning of the entire eastern pipeline and this leg in particular," the Transneft official said.

A source close to negotiations said on Tuesday China would extend a $15 billion loan to Russian state-run oil giant Rosneft against the guarantee of oil supplies, while Transneft's $10 billion would be granted with the infrastructure as collateral.

China Wind Systems Begins Production At New Facility

China Wind Systems.
by Staff Writers
Wuxi, China (SPX) Feb 17, 2009
China Wind Systems has announced that it has begun producing forged products at its new facility in Wuxi City after successfully completing equipment test runs.

Pursuant to preliminary agreements signed in September, China Wind Systems has delivered sample products to Wuxi Lida Gear Manufacturing, Gansu Keyao Electrical Power, and Hangzhou Advance Gearbox all of which have inspected and approved the Company's product prototypes.

Both Wuxi Lida and Gansu Keyao previously signed preliminary agreements with China Wind Systems to purchase up to 1,350 tons of rolled rings and 3,300 tons of wind tower flanges, respectively. Wuxi Lida and Gansu Keyao are expected to sign definitive purchase agreements with China Wind Systems upon receipt and approval of the initial units to be delivered pursuant to the preliminary agreement.

Hangzhou Gearbox has initially ordered 150 tons of gear rims from China Wind Systems. The Company will begin shipping orders immediately and expects the utilization rate of the new facility to ramp up as it fine-tunes the manufacturing automation process in the coming months.

"We are pleased to announce that our new production facility is now up and running and that our product prototypes have been delivered and accepted by key wind-power customers. While the utilization rate at our new facility is expected to be lower during the start-up period, we anticipate that our production output will increase significantly within the next few months as we complete the calibration process for the machines' automated system," said Mr. Jianhua Wu, chairman and CEO of China Wind Systems.

"We remain optimistic with the outlook of our forging business for the wind-power industry, particularly in light of the Chinese government's announced commitment to support wind energy as a key economic growth area, as recently reported by the Global Wind Energy Council. In 2009, China's new installed wind capacity is projected to nearly double again from 12.2 GW as China joins the U.S. as a leading market for new installed capacity," concluded Mr. Wu.

I guess China weren't joking when they talk of diversifying some of their forex into resources. This deal with Brazil comes days after the one with Russia.



Brazil, China sign oil supply agreement

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Feb. 19 -- Brazil, eyeing a loan of some $10 billion for development of the country's offshore oil deposits, has agreed to supply China with 100,000-160,000 b/d of oil for a year at market prices.

The oil supply agreement, to take effect immediately, came after a meeting between Brazil's President Luiz Inacio Lula da Silva and China's Vice-President Xi Jinping in the capital city of Brasilia.

Following the meeting, Jose Sergio Gabrielli, CEO of Brazil's state-run Petroleo Brasileiro (Petrobras), said China might lend Brazil as much as $10 billion and the terms of financing would be finalized and announced before Lula's visit to Beijing in May.

Gabrielli's words underlined an earlier report by Brazil's state news agency that Xi Jinping's visit to Brazil "should help the winding up of a $10 billion loan to be granted by China Development Bank (CDB) to Petrobras."

Petrobras and CDB have been negotiating the loan since November 2008, with the credit aimed at financing the exploration and exploitation of hydrocarbon reserves in the presalt layer.

"CDB would be paid with a secure supply of crude in the future, and apparently discussions are around the interest rates of the loan," the agency reported.

China invites bid for biggest solar PV power plant
2009-02-23 15:22:17 Print

BEIJING, Feb. 23 (Xinhua) -- A total of 50 power enterprises placed bids for a 10 megawatt solar photovoltaic generation project in northwest China's Gansu Province, the biggest in the country, the Shanghai Securities News said Monday.

Chinese bidders include China Power Investment Corporation, China Huaneng Group, China Guodian Corporation, China Datang Corporation, China Huadian Corporation and Suntech Power Holdings Co., Ltd. (STP.NYSE), Shi Lishan, an official with the National Energy Bureau was quoted as saying.

"Overseas power enterprises that have joined the bidding include a company from Denmark and one from Germany," said Shi.

Covering one million square meters, the solar PV power plant in Dunhuang city involves a total investment of 500 million yuan (73 million U.S. dollars). It will generate on average 16.37 million kilowatt hours of electricity each year.

The bid winners are obligated to complete the construction of the solar PV power plant within 18 months and are franchised to operate the project for 25 years, according to the bureau.
Editor: Lu Yanan

Major oil field found in north China


An oil field with reserves of about 100 million tonnes has been found in Siziwang Banner in north China's Inner Mongolia Autonomous Region, where the Shenzhou-7 space module landed last year.

Experts said the oil field has workable reserves of 35 million to 40 million tonnes.

The Siziwang Banner government will invest 20 million yuan (2.9 million U.S. dollars) in the first half of this year to set up five exploratory shafts for further exploration.

The government is expected to invest 200 million yuan to set up 100 oil-wells by the end of 2010. The oil field is expected to produce 500 tonnes of oil daily and 150,000 tonnes a year then.

(Xinhua News Agency March 1, 2009)

Iran signs $3.2-billion natural gas deal with China

Iranian President Mahmoud Ahmadinejad delivers a speech during a conference in Tehran, March 4, 2009. Iran announced a $3.2-billion natural gas deal today with China.
China will help in the exploration of the offshore South Pars field, believed to be part of the world's largest natural gas reservoir. The deals points to the limitations of U.S. sanctions.

Reporting from Beirut -- Iran announced a $3.2-billion natural gas deal today with China, a move that underscored the difficulty of using economic sanctions to pressure Tehran to bow to Washington's demands on its nuclear program.

Iranian state television quoted a senior government official as saying the deal with a Chinese consortium, announced two days after the Obama administration renewed U.S. sanctions against the Islamic Republic, would eventually include an unnamed European country as a partner.

Under the three-year deal, China will help develop the South Pars field, a sprawling cavity beneath the Persian Gulf seabed that is part of what geologists describe as the world's largest natural gas reservoir.

Washington has routinely renewed embargoes on doing industrial-scale business with Iran since the 1990s, even barring foreign companies that do more than $10 million a year of business with the Islamic Republic from operating in the U.S.

Under Washington's pressure, the French energy giant Total has quietly scaled back plans to develop Iranian gas fields. But many companies still do business with Iran, especially from the rapidly expanding Asian economic and political powerhouses of India and China and in countries with few commercial ties to the U.S., such as Russia.

Iran says it supplies China with 14% of its oil and recently announced that it was signing a $1.3-billion deal for two methanol plants with the Danish firm Haldor Topsoe and a $260-million deal for a tire factory with Italy's Maire Tecnimont.

On Thursday, the Obama administration extended U.S. sanctions for another year, a move Iranian President Mahmoud Ahmadinejad dismissed as "childish." President Obama has called for talks with Tehran as a way of resolving a years-long dispute over the nature of the Iran's nuclear energy program and its support for Lebanese and Palestinian militant groups opposed to Israel.

Some European officials, frustrated after years of attempts at dialogue with Iran, say that Obama must work harder to coordinate his policies with Moscow and Beijing.

"The big challenge will be to get the Russians and Chinese on board for tougher actions and sanctions once [the Americans] try to engage and fail," said a Western diplomat in Tehran, speaking on condition of anonymity.

Advocates of sanctions say they keep Tehran's ambitions in check and its leadership isolated by denying Iran revenue and technical expertise.

But Iranian officials say sanctions hurt mostly ordinary people while convincing all Iranians of the need to forgo Western partners in favor of cultivating their own technological advances. That includes Iran's controversial drive to master the enrichment of uranium, a process that can be used to produce fuel for a nuclear reactor or fissile material for a bomb.

^^^^

Iran has huge untapped gas reserves, over 800 trillion cubic feet of untapped reserves. They have a massive field shared with Qatar. Qatar is ahead in developing that field.

Although its stock value has collapsed due to the recession, Suntech maybe the world's largest producer of solar cells. Suntech is the largest PV cell in China, where there are a total of 9 PV cell manufacturers. Suntech's stock is traded at the NYSE under STP, and personally I think right now its a bargain.



Multinational solar Energy firm, Suntech Power Holdings Co., Ltd. (NYSE: STP, STP message board ), on Thursday celebrated overwhelming world’s record production capacity of solar cells and modules, according to its Chairman and CEO, D.r Zhengrong Shi. The accomplishment of the 1 GW of solar panels per annum coincided with the company’s ribbon-cutting ceremony at its new headquarters in Wuxi, China.stp_logo.png

Suntech maintained that the 18 000 square metre modern headquarters that is powered by a 1MW solar facade is unrivalled in size worldwide. Its features consist of energy efficient building materials, over 2 552 semi-transparent Light Thru (TM) solar panels, geothermal temperature control, and a comprehensive water recycling system. It is capable of producing more than 1 million kilowatt hours of electricity per year, which will in turn do away with over 600 tons of carbon emissions over the period.

“We believe that building integrated solar systems are the way forward for environmentally friendly architecture and our new headquarters is an excellent demonstration of how solar can be seamlessly incorporated into modern and attractive buildings”, commented Dr. Shi.
stp_solar_facade.png
These solar projects come at a time when the need for cleaner and more cost-efficient alternatives assume centre stage in China’s power generation markets. In the last reports collected for the United Nations, China was the world’s second largest carbon dioxide emitter via the combustion of fossil fuels, responsible for 18.4% of the overall yearly emissions. Other solar projects currently underway in that country includes the 3MW solar roof for the World Expo Shanghai 2010, and a number of 10MW+ projects reportedly in their infancy in Dunhuang city, Yunnan province and Qinghai province.

On January 8 Suntech stock closed at $12.75 with a volume of 3, 395,100, whereas previously it had closed at $12.00 with a volume of 3, 465, 900.