This report evaluates the Sichuan Gas Development and Conservation Project which was financed with an IBRD loan and a GEF grant with the aim of supporting the restructuring of the oil and gas sector in the People's Republic of China between 1994 - 2003. More specifically the project was designed to promote the development and conservation of gas resources in an economic, efficient and environmentally sound manner; and to strengthen the institutional capabilities of China National Petroleum Company (CNPC) and Sichuan Petroleum Administration (SPA).
The project comprised three main elements:
- investment; and
- institution building.
In terms of results, the project's development objectives were fully achieved and in many cases surpassed. Overall project outcome is rated as satisfactory only because of the delayed completion of the upgrading and rehabilitation of the system.
With about 10% of the country's population and a per capita income of only 50% of the national average, Sichuan was one of the poorest provinces in China. While the economic growth in Sichuan was averaging around 10%, the growth of energy supply had not kept pace with the demand. As a result of severe gas shortages, industrial production was curtailed and industries were switching over from gas to coal. The share of natural gas in the commercial energy consumption had decreased from 19% in 1979 to 11% in 1990 while the share of coal increased from 68% to 74%. Rise in coal consumption was exacerbating the already serious environmental impacts linked with its use.