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China's oil majors to divulge pipeline details in government reform plan

Published 07/09/2016, 12:32
Updated 07/09/2016, 12:40
© Reuters. The Sinopec logo is seen outside one of its gas stations in Hong Kong
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BEIJING (Reuters) - China's three oil majors will have to divulge intricate details about their vast networks of oil and gas pipelines, the government said on Wednesday, a key step towards increasing transparency for potential new entrants and customers.

The energy ministry said on Wednesday Sinopec, CNOOC and China National Petroleum Corp (CNCP) were required to release data, such as opening dates, pipeline type, capacity, route and pricing formulas before Oct. 31.

The announcement underscores Beijing's new push to reform the pipeline market, according to Lin Boqiang, director of Xiamen University's energy institute.

"Pipelines have many add-on costs, such as maintenance fees going back two to three decades. The details will help third parties to better adjust cost and profit of a project and make the market more transparent," Lin said.

Upstream and downstream users can also request other data such as unused capacity, quality and safety standards of a pipeline, the National Energy Administration said on its website.

Experts and analysts say Beijing is pressing ahead with its plan to separate pipeline transportation from the hands of crude producers and lowering the cost to consumers, in a move to open the network.

In August, Sinopec announced it would sell half of its premium natural gas pipeline business to investors.

© Reuters. The Sinopec logo is seen outside one of its gas stations in Hong Kong

The state planner has also drafted a rule to lower transportation costs of natural gas pipelines.

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