PetroChina seeks breakeven prices for imported gas ahead of midstream reform

Get this report


You can pay by card or invoice

Contact us

Submit your details to receive further information about this report.

For details on how your data is used and stored, see our Privacy Notice.

- FAQs about online orders
- Find out more about subscriptions

07 June 2019

PetroChina seeks breakeven prices for imported gas ahead of midstream reform

Report summary

The NOC previously raised gas prices with the primary purpose of managing the supply-demand balance. This time, it mainly aims to profit from gas sales. In March 2019, China officially announced it would establish a national pipeline company. PetroChina has only been profitable as an integrated gas company (gas production, imports, sales and infrastructure operation). It didn't make money as a standalone gas importer. On the eve of the unbundling of its profitable gas pipelines, PetroChina had to revise its pricing tactic to stop losses on imported gas. Despite possible short-term gas demand turbulence, midstream reform will benefit the long-term development of China’s gas market by achieving non-discriminatory third-party access, potentially improving pipeline operational and investment efficiency.

Table of contents

    • CNPC-PetroChina quick facts
    • PetroChina raises summer 2019 price above government benchmark
    • The NOC just raised prices in winter 2018/19
    • PetroChina has suffered huge losses on sales of imported gas
    • Creation of a national pipeline company will remove PetroChina’s profitable gas transmission business
    • Summer price scheme will allow PetroChina to finally break even on sales of imported gas
    • Near term, price hike is negative for demand growth, but could make the NOC re-focus on supply optimisation
    • Midstream and downstream will shoulder more responsibility in absorbing imported gas cost and supply security
    • potentially changing Chinese gas/LNG buyers’ focus on import preferences
    • Despite short-term turbulence, midstream reform will likely continue

Tables and charts

This report includes 5 images and tables including:

  • 2019 summer price scheme for wholesale gas at provincial city gate
  • PetroChina's profit/Loss in gas business
  • PetroChina's imported gas sales vs unit loss
  • Build up of pipeline imports price
  • Build up of LNG imports price

What's included

This report contains:

  • Document

    PetroChina seeks breakeven prices for imported gas ahead of midstream reform

    PDF 923.02 KB