IT IS UNDERSTOOD that the crude oil pipeline linking resource-rich Xinjiang Autonomous Region's Urumqi and NW Gansu Province's Lanzhou, with a capacity of 20m tons/yr, will be ready for commercial operation later this month. The pipeline will transport crude oil produced in Xinjiang, the location of upwards of 30% of China's onshore oil reserves, as well crude oil imports from Kazakhstan through the Sino-Kazakh crude pipeline that went into operation in May last year. A further new pipeline is currently being planned from Lanzhou to Sichuan Province's Chengdu at a cost of around $450 million, in part to supply China National Petroleum Corp's proposed refinery at Pengzhou City. Construction of the The West China pipeline project, which includes the Urumqi-Lanzhou crude pipeline and an 1,842-km long oil products pipeline, began in March 2005, and represents a total investment of $1.94 billion. It is the country's longest pipeline with the largest transmission volume. The oil products line, with a capacity of 10m tons/yr, began operation last October. Xinjiang is China's third-largest oil producer, with production last year of 25m tons. It is expected to produce 35m tons/yr by 2010 which, when combined with the 10m tons/yr imported from Kazakhstan, will make the region the supplier of around 20% of the country's total oil demand.