What’s new: China’s newly formed national oil and gas pipeline network, known as PipeChina, signed asset transfer agreements with its nine shareholders Wednesday, marking the state-owned pipeline giant’s official start of operations.
As the agreement came into effective Thursday, China Oil and Gas Pipeline Network officially took over oil and gas pipelines, storage facilities and personnel from state-owned energy giants PetroChina, Sinopec and CNOOC Group, PipeChina Chairman Zhang Wei said Wednesday at a video conference.
Besides the three state-owned oil and gas giants, other shareholders include China Chengtong Holdings Group Ltd., China Reform Holdings, National Council for Social Security Fund, China Insurance Investment Fund Co. Ltd., CIC International and Silk Road Fund.
To ensure the smooth transfer of assets, mobilize and coordinate tens of thousands of employees and meet energy demand in the coming winter are PipeChina’s primary tasks in the near future, said Zhang, who is formerly PetroChina’s general manager.
The background: The creation of PipeChina, under consideration since 2014, is aimed at providing access to an integrated national pipeline network in a bid to help small and non-state-owned companies to participate in the sector and eventually to help lower overall energy costs.
The restructuring is part of the Chinese government’s plan to combine state-owned companies into fewer, larger groups to help them compete with global rivals.
PipeChina will own 500 billion yuan ($73.6 billion) of combined assets and will be responsible for managing a pipeline network that’s expected to expand by 80% to 240,000 kilometers by 2025.
Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (bobsimison@caixin.com)
