PipeChina — the country’s newest state-owned behemoth
A series of gargantuan energy sector deals has created a new state-owned giant that will control most of the oil and gas pipelines in China.
The China Oil and Gas Pipeline Network Corp., commonly referred to as PipeChina, was founded by the government in December 2019 in an effort to centralize control of the country’s oil and gas pipelines.
In a series of deals worth hundreds of billions of yuan, PipeChina recently acquired infrastructure assets from China’s three largest energy companies — China Petrochemical Corp. (Sinopec Group), China National Petroleum Corp. (CNPC), and China National Offshore Oil Corp. (CNOOC). The deals also resulted in PetroChina and the Sinopec Group owning stakes in PipeChina, 29.9% and 14%, respectively.
- The deals are centered on acquisition of liquefied natural gas (LNG) terminals and oil storage facilities.
- Currently, pipelines are dominated by the three energy giants, especially CNPC.
Think of the deals as net neutrality for energy: Theoretically, centralizing China’s pipelines will ramp up national oil and gas production by making it easier for smaller, privately owned players to enter the energy sector.
