CNPC Separates Pipeline, Natural Gas Units, China Daily Says

  • Separations seen accelerating natural gas market reforms
  • Follows NDRC guidance to make pipeline operations transparent

China National Petroleum Corp., the country’s biggest petroleum producer, will separate its pipeline and natural gas sales units as part of an acceleration of gas-market reforms in the world’s biggest energy user, according to state-owned China Daily.

The Beijing-based energy giant will create a new pipeline company as well as five individual natural gas sales companies, China Daily reported. The decision will help accelerate market reforms in the country’s natural gas industry, the newspaper said, citing Xu Wenrong, a company vice president. The China Daily report didn’t clarify if the new units would be publicly listed.

CNPC and its main listed unit PetroChina Co. didn’t immediately respond to requests for comment.

The move dovetails with efforts by President Xi Jinping’s government to boost the use of natural gas in China’s energy mix and revamp the country’s massive state-owned enterprises. It also may help PetroChina achieve its goal of having natural gas account for half its output by the end of the decade.

The National Development and Reform Commission, China’s top planning agency, proposed in August that energy companies should provide more transparency on their pipeline operations and that owners should also create conditions that allow equal access to their networks for all producers and consumers. Those changes were seen as aimed at lowering prices for end users and boosting gas demand.

PetroChina aims to raise natural gas as a share of its production from 37 percent currently to 50 percent by the end of the decade, President Wang Dongjin told reporters in August. The company supports the government’s efforts to liberalize gas prices and implement market-based reforms, he said. CNPC raised non-residential natural gas prices in the country’s northern provinces by 10 percent starting from Nov. 20 through March 15 to help manage peak winter supplies, according to Shanghai Securities News.

CNPC owns 35,169 kilometers (21,860 miles) of natural gas pipelines, as well as five pipeline companies and one liquefied natural gas unit, it said last month. The company also holds 8,887 kilometers of crude pipelines and 7,812 kilometers for oil products.

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