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Friday, February 02, 2001, updated at 10:39(GMT+8)

Six Favorable Measures for Foreign Investors in Gas Pipeline Project

Bidding has begun on a gas pipeline project that will carry natural gas from western to eastern China, according to Beijing Review.

By December last year, project managers had sent more than 60 invitations to foreign investors to bid. Bidding is expected to end in June.

General Manager Chen Jiqing said in September that the State Development Planning Commission had authorized the project and named China Petroleum and Natural Gas Co. Ltd. as the Chinese sponsor of the project.

By publishing bids, foreign investors can cooperate with the Chinese sponsor and both sides will decide cooperation methods and details. Then the new partners will set up a new company in charge of building, operating and managing the pipeline.

The government issued six favorable policies related to the project:

  • Foreign investors can hold the controlling stake. According to previous policies, Chinese partners had to hold the controlling stakes or majority shares in gas pipeline projects, but this project is allowed to break such restrictions.

  • The Government will open up the urban construction of a natural gas network to foreign investors. Previously, foreign investors could not be involved in constructing natural gas network in cities. But in light of the importance of this project, the Chinese Government decided to add the natural gas supply system for the affected cities to the list of cooperative fields.

  • Foreign investors can choose the method of cooperation, such as joint venture, association or other approaches.

  • Equipment can be imported duty-free. Customs will exempt equipment imported for the project from Customs and value-added duties.

  • Foreign investors can expand their business to related fields. The Interim Stipulations issued by the State Development Planning Commission, State Economic and Trade Commission and Ministry of Foreign Trade and Economic Cooperation encourage foreign investment. The Interim Stipulations say that foreign investors who specialize in transportation, energy and other facilities may also enter their enterprises to other related fields. Those policies are suitable for this project.

  • Preferential land policies. The government will adopt more flexible and timely policies on the acquisition of land needed for the project.

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    Bidding has begun on a gas pipeline project that will carry natural gas from western to eastern China, according to Beijing Review.

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