fbpx 48281-001: PRC: Natural Gas for Land and River Transportation Project | Asian Development Bank

China, People's Republic of: PRC: Natural Gas for Land and River Transportation Project

Nonsovereign (Private) Project | 48281-001 Status: Approved

Air pollution continues to be a major environmental challenge in the PRC. Less than 1% of the 500 main cities in the PRC meet the air quality standards recommended by the World Health Organization. Although industrial emissions have stabilized in the past few years, a rapid increase in vehicular traffic volumes has created a new threat in the form of vehicle and vessel emissions. This factor, as well as the technological developments inspired by successful cases in Europe, has created renewed interest in the application of both compressed natural gas (CNG) and liquefied natural gas (LNG) in the transport sector, since heavily polluting fuels such as diesel can be replaced with natural gas, which produces no particulate matter, 25% less carbon dioxide, less than one-third as much nitrogen oxides, and 99% less sulfur dioxide than conventional fuel.

Project Details

Project Officer
Hoshi, Hayato Private Sector Operations Department Request for information
Country
  • China, People's Republic of
Sector
  • Energy
 
Project Name PRC: Natural Gas for Land and River Transportation Project
Project Number 48281-001
Borrower/Company China Gas Holdings
Country China, People's Republic of
Location
Type or Modality of Assistance
3206 Loan Ordinary capital resources USD 150.00 million Committed
67 B-Loan Other USD 300.00 million Approved
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Private sector development
Sector / Subsector

Energy / Energy efficiency and conservation - Oil and gas transmission and distribution

Transport / Urban public transport - Water transport (non-urban)

Gender Equity and Mainstreaming No gender elements
Responsible ADB Department Private Sector Operations Department
Responsible ADB Division Portfolio Management Division, PSOD
Responsible ADB Officer Hoshi, Hayato
Project Sponsor(s) CHINA GAS HOLDINGS LIMITED
Description

Air pollution continues to be a major environmental challenge in the PRC. Less than 1% of the 500 main cities in the PRC meet the air quality standards recommended by the World Health Organization. Although industrial emissions have stabilized in the past few years, a rapid increase in vehicular traffic volumes has created a new threat in the form of vehicle and vessel emissions. This factor, as well as the technological developments inspired by successful cases in Europe, has created renewed interest in the application of both compressed natural gas (CNG) and liquefied natural gas (LNG) in the transport sector, since heavily polluting fuels such as diesel can be replaced with natural gas, which produces no particulate matter, 25% less carbon dioxide, less than one-third as much nitrogen oxides, and 99% less sulfur dioxide than conventional fuel.

CNG is suitable for short-distance inner-city transportation and, therefore, can be used by cars, taxis, and buses. LNG has superior energy density and is more appropriate for long-distance transportation, such as long-distance trucking. Furthermore, there is untapped potential for further greening transportation using LNG for inland waterway transport (IWT). The PRC has the world's largest IWT network, both in terms of length and freight volume.

The proposed project is designed to facilitate the use of natural gas as a transportation fuel by building CNG and LNG refueling stations along long-distance land transportation corridors and IWT networks in the PRC that cross municipal and provincial boundaries. With the proposed facility, CGH plans to build and operate subprojects of 600 CNG and 200 LNG filling stations for land-based vehicle use and another 20 LNG filling stations for IWT vessel use during 2015- 2018.

Objectives and Scope

ADB's corporate loan was intended to facilitate the use of natural gas as a transportation fuel by building CNG and LNG refueling stations along long-distance land transportation corridors and IWT networks in the PRC that cross municipal and provincial boundaries.

The project targets construction and operation of 600 CNG and 200 LNG refueling stations for use by land-based vehicles and 20 LNG refueling stations for IWT vessel.

The successful implementation of the project and deployment of natural gas for multimodal transportation will diversify the energy mix in the PRC by increasing the proportion of natural gas, and increase the availability of natural gas as a transportation fuel in the country.

The outcome will be development of a commercially viable low-carbon transport fuel system. The project is expected to generate new jobs and reduce greenhouse gas emissions while also acting as a catalyst for private sector participation in the sector.

Status of Operation/Construction

As of March 2019, CGH owns nearly 600 vehicle filling stations that are either in operation or under construction. These stations may

provide filling service to more than 200,000 natural gas vehicles per day on average.

Linkage to Country/Regional Strategy

By supporting environmental sustainability, the project directly addresses key development goals of the PRC country partnership strategy and aligns with the country partnership strategy''s sector priority of pollution control. Environmental sustainability will continue to be a major strategic objective of ADB support to the PRC as will the PRC''s delivery of environmental regional and global public goods. The project strongly complements ADB''s East Asia Department's current initiatives in climate change mitigation energy projects and greening transport portfolio.

The project is in line with ADB''s Energy Policy, as further penetration of natural gas will contribute to promoting enhanced access to clean energy. It will also demonstrate ADB's commitment to focusing future transport sector support on the more sustainable forms of transport, in line with the Sustainable Transport Initiative. The project will serve as a demonstration of the potential of natural gas for IWT use in the PRC and in other developing member countries with IWT potential.

Safeguard Categories
Environment B
Involuntary Resettlement B
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects The project was processed as General Corporate Finance per SPS safeguard requirement 4 and classified as Category B for Environment, Category B for involuntary resettlement and Category C for indigenous peoples. CGH ESMS was updated to provide guidance on environmental assessment for two components of Phase 3 project to meet ADB SPS requirements: (a) CNG-LNG land re-fueling stations and the (b) river vessel filling stations. For each land re-fueling station, the summary of each Environmental Audit Report has to be attached in the Annual Environmental and Social Performance Report (AESPR) submitted to ADB. The loan component for the river vessel filling stations has been cancelled, hence, no further drawdown is expected for this project.
Involuntary Resettlement

The project is classified category B for involuntary resettlement. Refilling station locations can be flexibly selected and they are commonly sited along main roads. The construction of refilling stations will be mainly in medium-sized cities. Land acquisition is not expected to be significant and is normally carried out by the local governments before awarding of the concession.

CGH will follow its improved ESMS prior to the disbursement and recruit capable staff and/or consultants to ensure that the ESMS is implemented. The ESMS will include resettlement policy principles and procedures to ensure that subprojects using ADB funds are screened. If the subprojects entail physical and economic displacement, resettlement plans will be prepared following national laws of the PRC and in accordance with the Safeguard Policy Statement requirement 2 on involuntary resettlement.

Indigenous Peoples The project is classified category C for indigenous peoples. The project will not have any adverse impact on ethnic minorities.
Stakeholder Communication, Participation, and Consultation Information disclosure and consultations with affected people, as applicable, will be conducted in accordance with ADB requirements.
Timetable for assistance design, processing and implementation
Concept Clearance 21 Jul 2014
Credit Committee Meeting 06 Oct 2014
Approval 04 Dec 2014
Last PDS Update 14 Nov 2019

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

None currently available.

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

None currently available.


The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.