PetroChina shares shares in Guangdong Natural Gas Pipeline Network

According to the Guangdong Provincial Natural Gas Pipeline Network Construction and Operation Model Plan (hereinafter referred to as the “Project”) announced by Guangdong Province on the 29th, Guangdong Natural Gas Pipeline Network Co., Ltd. (hereinafter referred to as “Guangdong Pipeline Network”) is represented by the Guangdong Provincial Government’s Yudean Group. Relatively controlling, its share ratio remains unchanged in principle; other shareholders, in principle, based on the amount of Guangdong gas to determine the stock ratio, and establish a corresponding ratio adjustment mechanism. After the adjustment, CNOOC was the second largest shareholder; PetroChina and Sinopec were tied for the third largest shareholder. The shares ratio of Yudean Group, CNOOC, PetroChina, and Sinopec was: 28%, 26%, 23%, and 23% respectively.

In March 2008, CNOOC, Sinopec and Yudean Group jointly invested and registered the establishment of the Guangdong Pipeline Network, which is responsible for the planning, construction, and operation of the Guangdong Provincial Natural Gas Pipeline Network. The shares of the three parties are 40%, 30% and 30% respectively.

Guangdong Pipes Network became the first provincial natural gas pipeline network that was jointly owned by the three major oil companies. "Now that CNPC has staked in the company, CNPC's natural gas from the second line of the West-East Gas Pipeline can also enter the Guangdong market directly through the Guangdong Pipeline Network." Professor Hua Wei, director of the Natural Gas Utilization Research Center of South China University of Technology, told the "First Financial Daily".

At the same time of equity adjustment, the mode of operation of the natural gas pipeline network in Guangdong Province has also undergone major adjustments, adopting a combination of “comprehensive deployment” and “substitution”. “Overall deployment” refers to the provision of a certain percentage of gas supply from the gas supplier to the gas pipeline company at or above the local level that has a city gas operating right, which is to be sold in an overall plan by the Guangdong Pipeline Network. Its scope is limited to the life of urban and rural residents and the nature of gas use. "Substitute for Losses" means that Guangdong Pipes Co., Ltd. provides generation transportation services according to the requirements of gas suppliers or users, and collects transportation fees, covering the entire province's industrial and commercial use of gas and implementing market operations.

“The biggest advantage has broken the pattern of unification and unification. It is definitely a monopoly that is not conducive to the development of the natural gas market.” Hua Wei said that for the civilian part, it should insist on franchising, unified buying and selling, but for Both industrial and commercial parts should be directly traded by the manufacturer and the upstream, thus forming a price competition mechanism. This will not only promote the development of the downstream market, but will also in turn promote the development of the upstream market. "Only the downstream market for natural gas can be quickly developed. Our energy efficiency can be improved and the task of carbon reduction can be completed."