China has created a new company called the China Oil and Gas Piping Network Corporation (COGPNC), which will be responsible for the construction and connection of the country’s oil and gas pipelines, as reported by Chinese state media agency Xinhua.
Much of the country’s current oil and gas pipeline infrastructure is owned and operated by three other state-owned groups; China National Petroleum Corporation, Sinopec and China National Offshore Oil Corporation (CNOOC).
However, control of the pipelines has now been handed from them to COGPNC in order to unify and reform China’s oil and gas system.
According to the Financial Times, China is “overhauling” its oil and gas industries in order to diversify its energy supply and reduce the country’s reliance on coal. China is the world leader in coal production with 3,474 metric tonnes produced in 2018, and an expected 200GW to be added to its coal-fired energy production in the coming decades.
In moving away from coal, China will expand its oil and gas pipelines. According to research group Wood Mackenzie, the country’s pipelines already runs at maximum capacity during peak seasons and would need to handle a further 2.5 times its gas demand by 2040.
Sinopec tweeted: “China announced the creation of the China Oil and Gas Piping Network Corporation to help expand its national energy infrastructure, which marks a key move in China’s deepening oil and gas reforms.”
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Sinopec’s stock price is currently CNY4.95 (0.70¢) on the Shanghai Stock Exchange, giving the company a market capitalisation value of CNY570bn ($81bn).
Sinopec share price 2019
Meanwhile CNOOC’s stock price rose slightly on the Hong Kong stock exchange to HKD11.32 ($1.45) a share, giving it a market capitalisation value of HKD505.42bn ($64.5bn).