Sichuan gas find 'biggest discovery' ever for China

A new natural gas discovery in southeast Sichuan province - the single biggest ever - could ease domestic shortages in as little as a year and give China a stronger hand in energy negotiations with Russia, according to some experts.

China National Petroleum Corp, the country's biggest oil and gas producer, announced on Monday that it discovered natural gas reserves of 440 billion cubic meters, of which 308 billion cu m are technically recoverable.

The new reserves are in the Moxi block in Anyue county, Sichuan. It's the single biggest gas discovery in China, according to the company.

"The new find will become an important supply in the future amid increasing domestic natural gas consumption," said Wang Xiaokun, an energy analyst at consultancy Sublime China Information.

"In addition, pricing is always a tough problem for China-Russia natural gas negotiations. The new find may give China a bigger say in the future."

She said that CNPC can achieve commercial production of the new source within one year.

According to CNPC, a testing well at the site has a daily output of 1.1 million cu m, and the production facilities being built will help raise annual output to as much as 10 billion cu m.

That's equivalent to the annual natural gas imports from Myanmar. It's enough to supply Beijing for a year, Wang said.

China used 169 billion cu m of natural gas last year, according to the National Development and Reform Commission.

The central government is trying to boost the use of natural gas to reduce coal consumption and improve urban air quality. That drive has lifted natural gas imports in recent years.

Natural gas imports rose 25 percent last year to 53 billion cu m, 32 percent of total consumption, according to the CNPC Economics and Technology Research Institute.

The institute forecast that imports will rise 18.9 percent this year to 63 billion cu m.

Duan Zhaofang, a natural gas expert at the institute, estimated that China will consume 186 billion cu m of natural gas this year, up 11 percent, which means that almost 34 percent of natural gas use will depend on foreign supplies.