China has required the three biggest state-held oil corporations to transfer the management of half of their liquefied natural gas (LNG) terminals to the newly created state-controlled midstream firm, Caixin Global reported, citing industry insiders.
The transfer of 10 LNG terminals owned by China National Petroleum Corporation (CNPC), Sinopec, and China National Offshore Oil Corporation (CNOOC) is the first step in China’s plan to consolidate the oil and gas pipeline infrastructure into a new giant state-held midstream company.
At the end of last year, China launched the long-mooted state oil and gas pipeline group combining the infrastructure assets of the state-owned energy majors into one huge midstream group, which analysts say could be worth between US$80 billion and US$105 billion.
The new company is part of China’s efforts to allow its energy companies to focus on boosting exploration and production. Combining China’s pipeline infrastructure into one firm and opening access to this infrastructure to foreign and private producers would help the state oil and gas firms to focus on exploration at a time when China aims to increase its domestic production.
Earlier this year, CNOOC said it had signed with the new state pipeline giant to transfer to it the management of oil and gas infrastructure projects.
The ten LNG terminals that are set to be transferred to the new company include seven terminals currently managed by CNOOC, two terminals managed by CNPC, and one by Sinopec, according to Caixin.
The new state pipeline giant, China Oil & Gas Piping, will initially only have the right to manage the assets, while the oil and gas majors will still own the assets until audits are finalized. After the transfer of the LNG terminals to the new company, there still will be 11 other LNG facilities that will continue to be managed by the three oil and gas majors, Caixin’s sources said.