China’s pipeline reform: what to expect

Regulating China’s energy sector is becoming more challenging as the market grows bigger and more complex. To promote infrastructure investment and open pipeline access, China wants to create a national pipeline company, wresting control of the country’s pipeline network from the three national oil companies. The reform would encourage higher investment and unlock more oil and gas potential, particularly from unconventional sources. It could pave the way for China’s transition towards a market-based gas price mechanism. In turn, this will further stimulate gas demand, promoting the government’s decarbonisation agenda and reducing pollution. However, we expect the implementation to be gradual as China liberalises the market while mitigating impacts on gas demand and economics.