July 2019, Vol. 246, No. 7

Global News

PetroChina Raising Gas Prices Ahead of Pipeline Reshuffle

Bucking its normal practice, PetroChina has reportedly started preparing to consolidate its pipeline assets while recouping import losses by raising wholesale natural gas prices during the weak-demand spring season.

Beijing plans to launch this year a national oil and gas pipeline company that will combine assets from PetroChina, China National Offshore Oil Corporation (CNOOC) and Sinopec. While the move is hoped to spur private and foreign exploration investment, it also will eliminate massive guaranteed revenues, so PetroChina is trying to pare losses in its gas import business, an official told Reuters.

PetroChina, which supplies more than 70% of China’s natural gas, lost an estimated $2.6 billion in 2018 and $480 million in the first quarter of this year.

PetroChina needs the extra income to make “investments in the downstream gas distribution sector as it prepares to spin off pipeline assets,” said Wang Haohao, gas analyst with consultancy Zibo Longzhong. P&GJ

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