Insight
China’s zonal gas transmission tariff: changes and implications
*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
On 5 December 2023, China’s National Development and Reform Commission (NDRC) released new tariffs for inter-provincial natural gas transmission pipelines that PipeChina operates. The new rules simplify the number of tariffs from 15 previously to 4. The changes in tariffs differ significantly based on pipelines and zones. The Northwest, Northeast and Southwest zones have seen reductions, while the Central and East zones may have a slightly higher average tariff. Under the new tariffs, transmission costs for pipeline imports from Central Asia and Russia will increase, potentially benefitting LNG imports in coastal regions. The revised tariffs will improve market dynamics. With a uniform zonal tariff, wholesalers and buyers may focus on supply and route optimisation, which will likely allow PipeChina to build more connecting pipelines and force upstream players to reduce costs.
Table of contents
- Executive summary
- The zonal tariff is an important step in China’s gas sector reform
- Tariffs differ by pipeline and zones, influenced by transition and consumption features
- Transmission tariffs for pipeline imports will increase, potentially benefitting LNG imports in coastal regions
- The zonal tariff regime will facilitate supply optimisation and efficiency improvement
Tables and charts
This report includes the following images and tables:
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Evolution of tariff reformTariff comparisonMajor pipelines and the three transmission cities
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Zonal piped gas supply and demandZonal supply and demand in 2023, bcmInterprovincial gas allocation and LNG demand in the Central and East zoneCost of selected gas sources to major locations
What's included
This report contains:
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