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| Prospects Of New UO Pipe Deals For China's WEPP-2 |
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There are prospects that China National Petroleum Corp (CNPC) will take action from February 2009 onward to negotiate its new purchases of UO pipes for construction of China's second West-East natural gas pipeline project (WEPP-2), according to Japanese steel industry sources. In this connection, separate representatives of Japan's major integrated steelmakers visited Beijing last week to sound out both the Chinese government and CNPC on their plans for new UO pipe purchases. As a result, the Japanese steelmakers found that CNPC has opted to hold back on a second procurement tender for UO pipes within this year in favor of negotiating UO pipe deals anew in and after February next year. It is understood that CNPC has no intention of expediting its new purchases of UO pipes for WEPP-2. In the background, there are two main factors, experts point out. First, signs no longer occur of the world's tight supply-demand conditions for UO pipes as new global energy developments have been stalemated or deferred one after another. Second, a domestic system of UO pipe supplies is on track to shape up in China. In China, Baosteel Co Ltd has already brought on stream its UO pipe mill with an annual capacity of 500,000 tons. As a result, it is likely that CNPC will give priority to domestic sourcing when it negotiates for new purchases of UO pipes. On their part, the Japanese steelmakers see a possibility that domestic supplies of heavy plates for UO pipes rather than those of UO pipes represent a bottleneck in relation to WEPP-2. Accordingly, there is a feeling in market sources that new deals of heavy plates will precede those of UO pipes for supplies to WEPP-2. |
| last modified : Thu 08 Jan, 2009 [10:27] |
