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BP Withdraws from West-east Gas Project
BP's decision to withdraw its bid on construction of the west-east gas pipeline will not make other foreign companies reluctant to invest in the project, president of PetroChina said Sunday, according to today's China Daily.
"It is normal for some companies to pull out of the bidding process as the negotiations go on," said Huang Yan, president of PetroChina, which leads the construction of the US$5.6 billion pipeline. "The remaining bidders, including Royal/Dutch Shell and Exxon Mobil, have each expressed their desire to continue co-operating with us, and the negotiations are going on smoothly."
His remarks followed BP's announcement on Friday that it would withdraw from investing in the construction of the 4,000-kilometre pipeline.
The pipeline will transport natural gas from Northwest China's Xinjiang Uygur Autonomous Region to East China's Shanghai Municipality.
A BP spokesman said��"The demanding timetable and the advanced stage of the project definition prevent us from making the unique contributions we like to bring to all projects."
Huang declined to comment on whether oil giant PetroChina would offer incentives to keep the remaining bidders.
Earlier in June, PetroChina short-listed three foreign consortiums as the negotiation partners for the pipeline, including the consortium led by BP, Exxon-Mobil and Shell. A consortium led by Russian natural gas producer Gazprom and the Hong Kong China Gas Company Limited were added to the negotiation list several weeks later. The Hong Kong company later teamed with Shell.
According to a written statement by PetroChina, Malaysian oil company Petroliam Nasional- previously a member of BP's consortium - is continuing to participate in the partner selection process.
But a PetroChina spokesman refused to say whether Japan's Nissho Iwai company, another member of the consortium, still wants to bid.
According to the PetroChina statement, "it has been and will always act in the best interests of shareholders. It will adhere to the principle that investment returns should always exceed minimum requirements. Otherwise, PetroChina will not approve any investments, including the West-East Pipeline Project."
The pipeline is regarded as the flagship of China's plans to boost development of the resource-rich but economically backward western regions.
Pipeline construction is expected to start before the end of the year, with the first gas to flow to Shanghai by late 2003 or early 2004.
Shares in State-controlled PetroChina, the nation's largest oil producer, closed down 3.59 per cent at HK$1.61��20.6 US cents�� in Hong Kong on Friday after BP withdrew.
Other foreign companies were not immediately available for comment.
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