The Chinese state planner NDRC (National Development and Reform Commission) plans to establish a new nationwide oil and gas pipeline infrastructure group, which will combine the long-distance assets of the country's state-owned energy companies. The NDRC has not given a timetable or any details so far and the formal plan will be announced later in 2019.
The purpose behind the proposal is to help reform the energy sector by separating transmission and sales activities and by removing regulatory impediments to oil and gas exploration. With an open pipeline network, oil and gas producers would be able to focus on exploration and production activities without having to bear any additional costs to ship oil and gas to market. Once created, the new company would become the fourth large-scale state-run oil and gas company after Sinopec, CNPC and CNOOC. The most significant impact would fall on Petrochina, which currently controls the overwhelming majority of China's oil and gas pipeline infrastructure.
The creation of an oil and gas pipeline operator would be one of the largest revamps in the Chinese energy sector over the last two decades and would fit into the government current strategy, which aims at restructuring and streamlining several state-owned enterprises. The government is moving forward with reshuffling the energy sector and started with the coal producers, then the electricity generation assets and now the pipeline and fuel transportation market.
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