BEIJING Nov 26 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
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
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)