UPDATE 1-China mulls ways to allow private investment in energy

Tue Nov 26, 2013 6:48am EST

Related Topics

(Adds details)

BEIJING Nov 26 (Reuters) - The Chinese government is studying ways to allow more private investment in the energy sector, the National Energy Administration (NEA) said on Tuesday, as part of a wider reform to boost the economy.

China, the world's largest energy consumer, is gradually opening up the industry, but core businesses such as oil and gas exploration are still tightly controlled by state-owned firms.

"NEA is making efforts to remove policy obstacles for private capital to participate in energy development and provide a fair competitive environment for private firms," the administration said on its website (www.nea.gov.cn).

The government will simplify approvals for coal-fired plants and power grid projects, support private investment in oil and gas exploration and development and set requirements for refineries that can import crude oil, it said.

It will also accelerate rule-making on building and operating gas infrastructure, the agency said, in line with industry expectations that the government is finalising a policy to encourage third-party access to pipeline grids currently dominated by state energy giants.

In a policy draft that was circulated in August for feedback from industry participants, the government is also seeking to introduce more transparent accounting of transmission costs in the gas sector, which has bundled transmission and sales together.

Industry sources have said that Beijing it is expected to set a high bar for new entrants to the refining sector to obtain the necessary crude oil import quotas.

Refineries would need to have a minimum primary crude distillation capacity (CDU) of 100,000 barrels per day (bpd), with single units no smaller than 60,000 bpd. It also would require plants to own secondary processing units no smaller than 60,000 bpd and a minimum tertiary processing capacity of 4 million tonnes per year.

The government is widely expected to issue import quotes for around 10 million tonnes of crude to two independent refineries in 2014, doubling the volume issued to new players in just two years.

The NEA also said it would launch pilot projects on coal deep-processing, new energy and biofuels to entice private investment, without giving further details. (Reporting by Judy Hua and Chen Aizhu; Editing by Kim Coghill and Jane Baird)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.