Energy

On Monday, the National Energy Leading Group (NELG) officially published a draft of a proposed energy law on its website for public comment for a period ending on February 1, 2008. The draft stipulates that the government will establish a partially market-based energy pricing system, which will reflect supply and demand, as well as environmental costs. The earliest possible date for China's Energy Law to take effect will be 2009.

A major gas field in northwest China's Xinjiang Uygur Autonomous Region starts production on Wednesday. The gas field, located on the southern edge of the Junggar Basin, produces 1.5 million cubic meters of natural gas per day, which is expected to help ease energy shortages in northern Xinjiang. The gas field is the largest gas field in the Junggar Basin, a major region of natural-gas production in China.

Sinopec, China's largest oil refiner, has started providing crude oil to local private oil refineries in Shandong Province and inviting them to help raise the overall production of refined oil products in a bid to better ease the current shortages of oil supply around the country. The move came in response to the demand by China's National Development and Reform Commission (NDRC), which strongly urged the country's two big oil giants (Sinopec, or China Petroleum & Chemical Corporation, and PetroChina, or China National Petroleum Corp.) to make every effort to ensure a sufficient supply of refined oil products.

China will offer subsidies to domestic oil companies to offset high international oil prices amid efforts to ensure market supplies, according to National Development and Reform Commission (NDRC). Many gas stations across the country are experiencing shortages, with refineries unwilling to raise output in light of the low, government-controlled domestic fuel prices. The government will offer oil firms some profit rebates and scrap oil import duties to compensate them for losses at their refinery units.

China Petrochemical Corp. is among companies, including TransCanada Corp and ConocoPhillips, competing to build a pipeline that would allow the first commercial production of natural gas from Alaska's North Slope. North Slope gas reserves, estimated at 35 trillion cubic feet by the state, are currently inaccessible as there's no way to get the fuel to consumers.