NDRC Officially Frees Natural Gas Pricing from May 2020
According to the List, the pricing of a major part of natural gas sector will be freed from the governmental pricing and return to the market, including offshore gas, shale gas, coal-bed methane (CBM), coal-to-gas (CTG), liquefied natural gas (LNG), the purchase from direct-supply users and storage facilities, the exchange trade, the imported piped gas (pipelines commissioned after 2015, currently only CREP), and the competitive provincial grids. For the rest parts, including domestically produced natural gas and imported piped gas (pipelines commissioned before the end of 2014, including WEP I, II, III, and CMP), the current governmental pricing method will remain unchanged until the preliminary success of the marketization of China's natural gas market.
From the end of 2019, China’s natural gas market reform has been accelerating vividly. The national pipeline cooperation COGPNC is established on December 9, 2019, and the above-mentioned list is widely considered as the final piece of the puzzle. As concerned, the orientation of COGPNC in China’s natural gas industry is to control the midstream for transparency of market environment, but NDRC’s pricing right on the provincial hub is an objective blockade to COGNPC’s fully functioning. With provincial hub pricing stepping down from the stage of history, China’s natural gas market reform and pricing reform will enter a new era. COGPNC is shaping to provide a fair and transparent midstream environment, while all provincial governments had issued gas price supervision regulations in 2018 and drove municipal governments to issue local gas price and cost supervision system in 2019. Supported by a nonparticipating government and a transparent midstream, the market will become the talks between the upstream and downstream, and with decades of efforts, China’s natural gas marketization eventually sees the dawn.
