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Banks

China sets up state oil, gas pipe firm to boost competition: Xinhua

BEIJING (Reuters) - China has set up a long-awaited national oil and gas pipeline company in an effort to boost competition for the infrastructure that has mainly been controlled by three state oil groups, state news agency Xinhua reported on Monday.

“The new company will separate (oil and gas) transportation, production and sales, and open (transportation) to third-party entities, which will benefit market competition,” Xinhua said, citing an unidentified official at the new entity.

It is expected to manage most of the country’s pipeline infrastructure, controlled by China National Petroleum Corp (CNPC), Sinopec and CNOOC, some underground natural gas storage and several liquefied natural gas terminals.

CNPC owned 63% of China’s mainstream oil and gas pipelines, while Sinopec and CNOOC controlled 31% and 6%, respectively at the end of 2018.

Xinhua also reported that China’s cabinet had given approval for the State-owned Assets Supervision and Administration Commission (SASAC) to include the pipeline group on a list of companies that it regulates.

Citing an unidentified industry insider, Xinhua said that SASAC will have a 40% share in the new entity, with the three energy giants sharing the remainder, with CNPC holding 30%, Sinopec owning 20% and CNOOC 10%.

Reporting by Muyu Xu, Min Zhang and Shivani Singh; Editing by Kim Coghill, Kenneth Maxwell and Alexander Smith

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