BEIJING, May 30 -- PetroChina Co. Ltd., Asia's top oil firm, plans to spend around 4 billion yuan (US$498.6 million) building underground storage facilities for natural gas, according to a China Daily report.

    They will be part of the west-east pipeline project, which carries gas from the country's western desert deposits to the booming eastern coast, the paper quoted a senior company official saying.

    The stores will help cut shortages during the peak winter season and provide a place to hold surplus gas when demand falls during summer months.

    They could eventually hold up to 2 billion cubic meters of gas, company adviser Zhai Guangming told the paper.

    No detailed timetable has been drawn up for construction of the storage sites, which will be located in Anhui and coastal Jiangsu provinces, the PetroChina official said.

    An initial unit in Jiangsu with 140 million cubic meters of capacity, which took three years to build, is expected to be finished by July 1.

    "For the moment, the 140-million (cubic meter) unit is enough to handle our current supply," the official said.

    China wants to double the portion of its energy that comes from clean-burning natural gas to 6 percent by 2010, as it tries to cut back on polluting coal and pricey oil.

    But infrastructure constraints, sluggish production efforts, a lagging pricing system, and soaring global markets have left the country's booming east short of gas.

    The US$8 billion west-east pipeline, intended as the cornerstone of China's natural gas strategy, is too small, industry officials have said.

    PetroChina last year produced over 70 percent of the country's 50 billion cubic meters of natural gas output.

    Zhai predicted national gas production could rise to 150 billion cubic meters by 2020.

    (Source: Shenzhen Daily/ Agencies)