China makes start on midstream liberalisation - Interfax | A consultation document from the National Energy Administration (NEA) outlining plans to open up China's midstream gas market has been met with cautious optimism by experts, who believe the move is a positive step towards mobilising the country's gas resources. The guidelines – published by the National Development and Reform Commission (NDRC) on 2 August and open for consultation until 16 August – present a framework for opening up a segment of China's gas chain that has previously been dominated by China National Petroleum Corp. (CNPC) and Sinopec. ...The guidelines from the NEA cover a broad spectrum of the midstream gas infrastructure – including gas transmission pipelines, LNG terminals, gas liquefaction facilities and storage. ...China's gas pipeline network is projected to reach 150,000 km by 2020 before doubling to 300,000 km by 2030. But with construction lagging behind demand that has grown rapidly with the domestic economy, private capital is expected to play a key role in overcoming the infrastructure deficit. (more after break)
"The capital expenditure needed to build out all the pipelines to reach the gas targets is huge. It would be quite a big ask, even for a company like CNPC, to build all the pipelines needed to get gas demand up to the planned targets," Neil Semple, principal at The Lantau Group, told Interfax.
If [China] wants to mobilise the gas resources it has, then it needs more players," Semple added.
"You've got to get more people involved upstream, and if that is going to happen, you have to make the building of pipelines a more fluid and open operation and hence make access to markets easier."
CNPC has already shown itself willing to court private investors for some of its largest projects, with PetroChina – the listed subsidiary of CNPC – welcoming the introduction of private capital last year from China's state pension fund and the non-governmental All-China Federation of Industry and Commerce to the third West-East Pipeline