Majors Use PipeChina as Asset Dumping Ground

摘要

Beijing's bid to establish PipeChina as the country's oil and gas grid company is unlikely to boost gas demand by creating more competition because of the quality of the assets it is getting from the three state-run giants,Chinese industry insiders say.In a bid to break the trio's monopoly over gas infrastructure,the government has ordered them to sell some of their pipelines and LNG terminals to PipeChina by Sep.30.But there are problems.Sources claim the majors are offloading underperforming or under-con-struction assets that require more investment,so third parties wouldn't be interested in them.And with better quality assets-such as some of the pipelines and terminals being sold by China National Petroleum Corp.(CNPC)-run rates are so high that third parties can't use them.That means the majors'de facto monopoly will continue,spelling bad news for international LNG suppliers,as Sinopec is the only one expected to be on the lookout for new term supply any time soon.