June 10, 2008

Sichuan Quake Impacts Oil Supply

Heroic efforts to drain the dangerous Tangjiashan 'quake lake' are jeopardizing the sole oil pipeline to Sichuan Province and giant Chongqing municipality. State-owned conglomerate China National Petroleum Corp. (CNPC) suspended operation of the Lanzhou - Chengdu - Chongqing pipeline for an unknown length of time.

A CNPC manager in Sichuan told Xinhua it had 20 days of reserves to offset the disruption. The pipeline has capacity t0 transport 6 million tons of oil annually and supplies almost three fourths of the oil needed for the region and downstream to Yunnan and Guizhou Provinces.

There is a potential impact for short-term shortages and price inflation in the area.

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