PipeChina Positioning in China Natural Gas Reform
China’s state-owned oil and gas midstream giant China Oil & Gas Pipeline Network Corporation, or so-called as PipeChina, has recently acquired the last piece of its territory puzzle by absorbing Kunlun Energy’s asset into its 500 billion RMB asset portfolio, and after more than a year of consolidation and optimization, PipeChina is now ready to show its mighty in the natural gas sector and carry out its philosophy “green, reliability, transparency, integrity and win-win” to the market.
The first and foremost theme of the market reform that PipeChina is responsible for is the impartial open-up reform. Before PipeChina’s establishment, China’s natural gas market was in an oligopolistic competition, especially for the piped gas market, and the three oil giants with cross-stream controls had enormous seller’s bargaining power. With PipeChina dissevering the midstream apart from the cross-stream monopoly and impartially opening it up to all market participants and 2-tier players, PipeChina is pushing the market competition from monopolistic competition to perfect competition step by step but at a fast pace.
As a matter of fact, PipeChina has implemented the impartial open-up trials in 2020 from LNG terminal slots to pipeline carrier demonstrations. PipeChina kicked off the carrier system in Oct 10, 2020, together with the release of the spare capacity of its midstream assets such as pipelines, terminals and UGS. Sooner later, on Nov 17, Jovo Energy delivered the first LNG cargo at PipeChina Yangpu Terminal in Hainan, as the first LNG import open-up case, on Dec 1, Towngas started to provide peak-shaving UGS output at its Jinhua UGS via PipeChina’s network, as the first UGS open-up case, and on Dec 8, Xinjiang Kingho Energy started to deliver coal-based natural gas to Shandong Province via PipeChina’s WEP pipeline, as the first pipeline open-up case. With more and more carriers participating,
