The construction of Asia’s longest coal pipeline in northwestern China’s Shaanxi province has lagged behind its original schedule as plunging coal price depressed the sponsor’s cash flow.<br /> <br /> Designed with an annual capacity of 10 million tonnes, the 748 km long coal pipeline, connecting coal-rich Shenmu County in northern Shaanxi to Weinan in the central part of the province, has missed its plan to complete construction by June this year, mainly due to a lack of funds, sources have said.<br /> <br /> The project, launched by Shaanxi Coal and Chemical Industry Group Co., Ltd., the province’s largest coal producer, was to break the transport bottleneck in northern Shaanxi, where rail transport capacity is controlled by Shenhua Group.<br /> <br /> With estimated cost of 7 billion yuan, less than one third of the cost to build a railway of corresponding capacity, the project had been regarded as the most competitive project for fund-raising of Shaanxi Coal Industry Co., Ltd., the listed branch of Shaanxi Coal and Chemical Industry Group.<br /> <br /> However, the slump in coal prices cringed the company’s cash flow and equity financing through IPO, which only raised 4 billion yuan in late January this year, far off the initial target of 17 billion yuan.<br /> <br /> Construction of the project had been delayed even after it gained approval of the provincial development and reform commission in March 2011. Though kicking off construction in September 2011, the project didn’t enter a full scale construction until April 2013, one insider said.<br /> <br /> <p> So far, the company has only completed the machinery part of the pipeline, and hopes to conduct a trial run in 2015 while the date for full operation is still up in the air, the insider added. </p> <p style="text-align:center;"> <img src="/upfiles/news/image/20140624/20140624155848_1831.jpg" alt="" /> </p>