Chinese upstream, downstream players lock horns over gas pricing [Gas in Transition]

Chinese upstream, downstream players lock horns over gas pricing [Gas in Transition]

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Natural Gas News
Chinese upstream, downstream players lock horns over gas pricing [Gas in Transition]

Summary

A standoff between major upstream and downstream players in China’s gas market over the price and expected volume of gas allocations is forcing Beijing to reckon with its convoluted gas pricing mechanism. [Gas in Transition, Volume 3, Issue 5] by: Shi Weijun

A dispute between state-owned upstream companies that dominate China’s gas supply, and independent downstream utilities that buy and resell volumes from them, has prompted calls for changes to gas pricing regulations. A number of provinces and cities have already made adjustments in recent weeks, which could be rolled out nationwide by China’s central government in coming months. The disagreement that prompted adjustments to pricing regulations first spilled into the open in December and January, when severe gas shortages afflicted rural areas of Hebei province in northern China – despite a relatively balanced Chinese gas market at the time. The outages that left residents unable to cook food or heat their homes in the middle of winter prompted angry complaints, and forced local bureaucrats to intervene to manage the supply. The government blamed China Gas Holdings, one of the country’s biggest downstream gas distributors...