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Pipeline Project Open to Foreign Investors
Foreign investors will be allowed to control stakes in the construction and operation of the proposed giant west-to-east gas pipeline, announced an industry official Wednesday in Beijing.
Overseas investment will also be allowed in urban gas pipeline networks, said Zhang Guobao, vice-minister of the State Development Planning Commission.
"These are two significant changes in China's current policy frameworks,'' Zhang stressed. According to existing State regulations, the Chinese side should hold a controlling stake in the construction and operation of natural gas pipelines. Foreign investors are currently prohibited from investing in urban gas pipe projects.
Zhang said the central government is determined to involve foreign investment in all sections of the colossal project. The west-east gas transmitting project includes three parts: pumping natural gas in Xinjiang's Tarim Basin and in Ordos Basin, laying a 4,167-kilometre pipe from Xinjiang to Shanghai, and selling gas to consumers.
Zhang said foreigners have a number of investment channels open to them, including setting up joint ventures, co-operative firms or buying stocks in PetroChina. Listed in Hong Kong and New York three months ago, PetroChina is the major Chinese operator of the project.
Zhang said many multinational oil giants as well as non-oil financial services companies have shown great interest in the project.
The project's total investment is expected to be 120 billion yuan (US$14.5 billion). Construction of the pipeline, to begin next year and be complete by 2003, will cost 40 billion yuan (US$4.82 billion), said PetroChina Chairman Ma Fucai.
After 2004, the pipeline will channel 12 billion cubic metres of gas annually, but its handling capacity could later be expanded to 20 billion.
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