Private Firms Invest in Construction of Main Gas Pipelines

On 28 September, 2014, Inner Mongolia Transport Investment Co.,Ltd cooperated with two private corporations to build Inner Mongolia Oil and Gas Investment Co., Ltd. The new company plans to build natural gas transmission pipelines and oil transmission pipelines. Once approved, it will be the first time in China that privately owned companies participate in construction of main gas pipelines. 

 

It is known that initial registered capital of the new enterprise is 1.5 billion RMB. Shares of those two private enterprises reach 60%. The joint venture company intends to build two gas transmission pipelines and three oil transmission pipelines. These projects will transmit and sell gas and oil from Inner Mongolia to Peking, Tianjin, Hebei and Shandong. It is expected to transmit 50 billion cubic meters of gas and 18 million tons of oil. The above mentioned projects are still in planning stages and need to be handed into relevant government departments for examination and approval.  

 

Previously, Several Opinions of State Council on Encouraging and Guiding Healthy Development of Private Investment clearly stated that China encourages private capitals to participate in construction of oil and gas. Private firms are permitted to work together with country owned oil enterprises on the exploration of oil and gas. They can also make contribution to the construction of storage facilities and pipeline transportation networks for crude oil, gas and refined oil products by possessing some certain of stocks. 

 

It is introduced that China private companies only take part in the domestic construction of branch gas pipelines. The approval of above projects means that construction of main gas pipelines will be built with domestic private firms for the first time. It means a lot for pipeline construction.