Sam Fletcher
Senior Writer

Days after the massive May 12 earthquake hit the Sichuan province of central China, its potential impact on world energy markets remained uncertain, but damage to hydroelectric and nuclear power plants could prove critical, analysts said.

The earthquake was reported to have damaged as many as 17 dams in Sichuan and neighboring provinces. French nuclear experts said it possibly could have damaged several nuclear fuel and research sites as well. Moreover, recovery efforts could boost demand for petroleum fuels for construction and transportation.

"Oil demand growth from 2007 to 2008 in China was recently estimated by the International Energy Agency to come in at 350,000 b/d on a base of 7.54 million b/d. In our view, the earthquake may actually add to this forecast," said Adam Sieminski, chief energy economist, Deutsche Bank, Washington.

The Sichuan province is China's main gas producer and consumer, accounting for a quarter of the country's gas production. PetroChina, the primary operator, said it had restored a third of the daily output of 6 million cu m of gas that was shut in after the quake. Sinopec's giant Chuanxi gas field in Sichuan was reported to be producing at 20% of capacity after many chemical plants were closed, up from only 10% earlier when 1,000 gas wells were shut in. As of May 15, the field was reported to be producing 1.6 million cu m/d.