Natural Gas Business Drives PetroChina Growth

The natural gas flowing in the West-East Pipeline of China Petroleum [10.47 - 1.13%] (601857.SH) is expected to drive the company's growth.

China National Petroleum Corporation gave such a figure last weekend: With the addition of multiple sources, the target market for the West-East Gas Pipeline in January will reach gas demand of 71 million cubic meters to 73 million cubic meters per day.

These sources include: The daily supply of Tarim oil and gas fields is about 47.5 million cubic meters, while half of the imported Asian gas is transferred to the West-East Gas Transmission Market, with a daily supply of about 12.5 million cubic meters. The Suining Line, the link between the first line and the Shaanxi-Beijing second line, can transfer 7 million to 14.3 million cubic meters of gas per day, plus the amount of gasification between 10 and 20 million cubic meters in Jiangsu Rudong. Daily output of 1.5 million cubic meters of CBM.

If the above data is the daily average transportation volume in 2012, then the output of China Petroleum West-East Gas Pipeline will be around 26.65 billion cubic meters.

Since the 2011 West-East Gas Pipeline first line and second line respectively may bring 17 billion cubic meters and 5 billion cubic meters of natural gas, the daily gas volume of 73 million cubic meters per day is already higher than the daily throughput of the same target market last year. 10% higher.

Guo Bo Securities researcher Liu Bo believes that 2012 should be much more than the daily average of 73 million cubic meters. "This year, CNPC's West-East Gas Pipeline II will be fully put into production, and its transportation volume to China will increase from several billion cubic meters to 30 billion cubic meters. Together with CNPC's LNG project in Dalian, it was completed in April last year (Phase I There are also 4.2 billion cubic meters of gas supply per year, and CBM will increase. The increase in CNG's natural gas volume this year may be 10% to 20% higher than in 2011."

According to natural gas market expert Duan Zhaofang of the China Petroleum Economic Research Institute, China's natural gas production in 2011 was about 101.1 billion cubic meters, an increase of 6.32% over the same period last year. China National Petroleum Corporation has 765 million cubic meters, accounting for 75%, and CNOOC (00883.HK) and Sinopec (00386.HK; 600028.SH) have output of 14.6 billion cubic meters and 10.9 billion cubic meters respectively.

Based on the above data, assuming that the price of natural gas is based on the first three quarters of last year (the price has increased by 16%), CNPC’s total revenue for natural gas in 2011 will increase 9.6% year-on-year, and revenue may reach 128.2 billion yuan.

In 2011, the total domestic natural gas imports were approximately 31 billion cubic meters, including LNG and land-based natural gas. Ignoring China's LNG natural gas, the total natural gas revenue from the Central Asia channel is only about 5 billion yuan. Therefore, the company's total natural gas revenue in 2011 may be more than 130 billion yuan. Based on the above figures, the company's natural gas revenue growth in 2011 may exceed 10%.

Of course, for CNPC, crude oil revenue in 2011 will also increase year-on-year, mainly due to higher oil prices.

According to the authoritative channel data obtained by the reporter, in 2011, the average prices of WTI and Brent crude oil were US$95/barrel and US$111.23/barrel respectively, an increase of 18% and 38% year-on-year in 2010. The average price of Daqing Oilfield is also 110.46 US dollars / barrel, an average increase of 40% in 1 year. The company's crude oil production may be similar to the average increase in recent years, it is estimated that it will exceed 5%, and thus the company's sales due to crude oil, estimated or increased by more than 20%.