Are you sure?

China to regulate natural gas imports from June 10

The Chinese government plans to introduce new measures on June 10 to regulate imports of natural gas in order to protect its three major gas importers from intense domestic competition.

Sources with the Ministry of Commerce said on Tuesday that the move would end the chaotic competition between China's three oil and gas giants - China National Petroleum Corp., Sinopec and China National Offshore Oil Corp. - in the purchase of gas, which has helped overseas exporters raise prices. The competition has been blamed on the lax import system for natural gas that is currently in place. Enterprises, at present, do not have to satisfy any conditions to obtain import permits for natural gas. After June 10, each application for an import permit will be examined and approved.

China aims to slash its energy consumption per 10,000 yuan of GDP by 20% by 2010 so natural gas, seen as an ideal way to meet this target, is now in huge demand nationwide. Apart from the Big Three, enterprises controlled by local governments have joined the competition for gas imports, which is contributing to a further hike in prices. According to the National Development and Reform Commission, Indonesian exporters have adjusted the price of LNG (liquefied natural gas) from $25 per barrel to $38 per barrel for Chinese buyers in eastern China's Fujian Province. The commission also revealed that the price of natural gas exported by Russia to China is likely to be raised to $180 per 1,000 cubic meters.

Han Xiaoping, a senior analyst with Qunying Energy Consulting Co., said international natural gas markets are decided by gaming between major buyers and major sellers. Bringing gas imports under unified control will be conducive to increasing the influence of major Chinese buyers on the market. (people.com.cn)