China plans new state pipeline company in massive energy reshuffle (updated)

Kunlun Energy

27/02/2019 07:36

(Adds comment, context)
    SINGAPORE, Feb 27 (Reuters) - China will announce a plan
this year to form a national oil and gas pipeline group
combining the long-distance pipeline assets of the country's
state-owned energy companies, in the sector's largest reshuffle
in two decades, said three persons with knowledge of the plan.  
    China's economic planner, the National Development and
Reform Commission (NDRC), approved the plan for the group last
month, including details of assets to be incorporated, and final
approval from China's State Council is still pending, said one
of the sources.
    The initiative is considered the biggest energy market
reshuffle since 1998 when Beijing restructured the entire sector
and established China Petroleum and Chemical Corp (Sinopec)
 600028.SS  and PetroChina  601857.SS . The biggest impact from
the changes will fall on PetroChina, which controls 70 percent
of China's oil pipelines and nearly 80 percent of the major gas
pipelines. 
    The new entity will effectively become a fourth
state-controlled energy company next to Sinopec, China National
Petroleum Corp, the parent company of PetroChina, and China
National Offshore Oil Corp. 
    It is unclear when Beijing will officially announce the plan
or when the new firm will be launched, but companies have been
making preparations for the move, said a second source, an
executive at a state-owned oil company. That includes PetroChina
relocating its pipeline segment's management team to a separate
office tower in Beijing, the source said. 
    The sources declined to be named due to the sensitive nature
of the matter.     
    The NDRC did not respond to Reuters request for comment. 
    "It's the largest-ever step in (the oil and gas) sector
reform. At the core of it, it's about removing a key bottleneck
in the market and allowing producers and consumers equal access
to infrastructures," said Dong Xiucheng, director of energy
policy research at University of International Business and
Economics in Beijing. 
    
    

 (Reporting by Chen Aizhu; editing by Christian Schmollinger)
 ((aizhu.chen@thomsonreuters.com; +65 6870 3284; Reuters
Messaging: aizhu.chen.reuters.com@reuters.net))