PetroChina, Sinopec transfer $56bn assets to PipeChina

Spanish Market: Natural gas
24/07/20

China's two biggest energy firms PetroChina and Sinopec have agreed to sell oil and gas infrastructure assets valued at 391.5bn yuan ($56bn) to China Oil and Gas Pipeline Network (PipeChina), paving the way for the new state-run pipeline company to start operations in the next few months.

The transactions, including the transfer of personnel and ownership of assets, are expected to be completed by 30 September. PipeChina is scheduled to start operations on the same date.

State-controlled PetroChina will transfer all 20 of its units that own oil and gas pipelines, which are valued at Yn268.7bn. These include the major 77bn m³/yr West-to-East pipeline network and the Chinese portion of the 38bn m³/yr Power of Siberia 1 gas pipeline from Russia.

In return, PetroChina will receive a 29.9pc stake in PipeChina, worth Yn149.5bn, plus a cash payment of Yn119.2bn. PetroChina will remain China's largest natural gas supplier following the spin-off of its pipeline assets.

Fellow state-run firm Sinopec will sell all of its natural gas and crude/fuel pipeline units to PipeChina for Yn122.7bn. It will receive a 14pc stake in the new firm and Yn52.7bn in cash in return. The sale includes Sinopec's 15bn m³/yr Sichuan-Shanghai and 30bn m³/yr Xinjiang-Guangdong natural gas pipelines, as well as its 6mn t/yr Beihai LNG terminal in Guangxi province.

Sinopec, like PetroChina, intends to focus more on upstream development, downstream gas sales and new opportunities following the spin-off of its assets.

The asset transfers effectively break up the dominance enjoyed by Sinopec, PetroChina and fellow state-owned firm CNOOC over oil and gas upstream and midstream infrastructure, including pipelines and distribution.

The agreements leave PetroChina and Sinopec as the two largest shareholders in PipeChina. The country's third major state-controlled energy firm, CNOOC, will own just 2.9pc of the new company.

CNOOC is the only major firm yet to announce an asset sale to PipeChina. It agreed to an asset management transfer with PipeChina in April but has not revealed details of the transaction.

LNG terminal transfers

Several of CNOOC's LNG receiving terminals are expected to be transferred to PipeChina. These include the 2.2mn t/yr Tianjin floating storage and regasification unit, the 2mn t/yr Yuedong and, 4mn t/yr Diefu terminals in Guangdong, the 600,000 t/yr Fangchenggang terminal in Guangxi and the 3mn t/yr Yangpu terminal in Hainan. Two of CNOOC's under-development terminals, the 3mn t/yr Zhangzhou project in Fujian and the 5mn t/yr Longkou facility in Shandong, will also be transferred to PipeChina after the first phase of construction is completed.

The 3mn t/yr Dalian terminal in Liaoning and the under-construction 4mn t/yr Diefu terminal are also expected to be transferred to PipeChina. These assets are owned by PetroChina subsidiary Kunlun Energy and are not included in today's deal, with Kunlun still in talks with PipeChina on the asset transfer.

Kunlun also owns four Shaanxi-Beijing gas pipelines with a combined capacity of 60bn m³/yr, which are also expected to come under PipeChina's ownership.

The other shareholders in PipeChina are investment firms China Chengtong Holdings and China Reform Holdings, each with 12.87pc stakes; the national social security fund with 10pc; China Insurance Investment with 9pc; regulatory watchdog the State-owned Assets Supervision and Administration Commission (Sasac) with 4.46pc; and sovereign wealth funds CIC International and the Silk Road Fund with 2pc each. All are state-owned.

PipeChina's diversified shareholding structure is an attempt to foster greater market competition and boost access to import and distribution facilities. Third-party access to terminals and pipelines has previously been restricted, or unavailable, to independent Chinese firms, including second-tier firms in the city gas and power sectors.

PipeChina was established in December 2019 as part of broader reform of China's domestic oil and gas industry, to create greater transparency, liquidity and competitiveness by liberalising the transmission system.

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11/05/25

India, Pakistan reach US-mediated, fragile ceasefire

Dubai, 11 May (Argus) — A US-mediated ceasefire reached on Saturday between nuclear-armed neighbours India and Pakistan is still holding, following four days of intense fighting. "After a long night of talks mediated by the United States, I am pleased to announce that India and Pakistan have agreed to a FULL AND IMMEDIATE CEASEFIRE," US president Donald Trump posted on his social media platform Truth Social on Saturday. India and Pakistan will now start negotiations on a broad set of issues at a neutral site, US secretary of state Marco Rubio said on social media platform X. India's military on 7 May launched attacks against targets in Pakistan and Pakistan-administered Kashmir in retaliation for an April terrorist attack that killed dozens. But by Saturday, the two countries seemed to be edging toward all-out war, as their militaries targeted each other's bases. India's foreign minister Subrahmanyam Jaishankar confirmed the ceasefire, saying on X that "India has consistently maintained a firm and uncompromising stance against terrorism in all its forms and manifestations. It will continue to do so." Pakistan "responded positively to the ceasefire proposal for regional and global peace, and its people and I hope that dialogue will now be chosen for resolution of water and Kashmir disputes," Pakistan's prime minister Shehbaz Sharif said in a televised address. Trump also praised leaders of both countries for agreeing to halt the aggression and said he would "substantially" increase trade with them, although this was "not even discussed". Kashmir is a contested area between India and Pakistan, and the two have twice gone to a war over the region. Fear of the conflict spreading roiled global financial markets. India is the region's second-biggest oil buyer after China — importing around 4.5mn b/d last year — and a major customer for other commodities, including LNG and coal. Pakistan also imports fertilizers, coal, oil products and LNG. The escalation between the two severely limited direct trade between them. Airlines in the region as well as some Mideast Gulf carriers rerouted or cancelled flights to avoid Pakistani airspace. But the Pakistan Airports Authority said on Saturday that "Pakistan's airspace has been fully reopened for all types of flights." By Bachar Halabi Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

White House ends use of carbon cost

09/05/25

White House ends use of carbon cost

Washington, 9 May (Argus) — The US is ending its use of a metric for estimating the economic damages from greenhouse gas (GHG) emissions, the latest reversal of climate change policies supported by President Donald Trump's predecessors. The White House Office of Management and Budget (OMB) this week directed federal agencies to stop using the social cost of carbon as part of any regulatory or decision-making practices, except in cases where it is required by law, citing the need "remove any barriers put in place by previous administrations" that restrict the ability of the US to get the most benefit "from our abundant natural resources". "Under this guidance, the circumstances where agencies will need to engage in monetized greenhouse gas emission analysis will be few to none," OMB said in a 5 May memo to federal agencies. In cases where such an analysis is required by law, agencies should limit their work "to the minimum consideration required" and address only the domestic effects, unless required by law. OMB said these steps are needed to ensure sound regulatory decisions and avoid misleading the public because the uncertainties of such analyses "are too great". The budget office issued the guidance in response to an executive order Trump issued on his first day in office, which also disbanded an interagency working group on the social cost of carbon and called for faster permitting for domestic oil and gas production and the termination of various orders issued by former president Joe Biden related to combating climate change. The metric, first established by the administration of former US president Barack Obama, has been subject to a tug of war between Democrats and Republicans. Trump, in his first term, slashed the value of the social cost of carbon, a move Biden later reversed . Biden then directed agencies to fold the metric into their procurement processes and environmental reviews. The US began relying on the cost estimate in 2010, offering a way to estimate the full costs and benefits of climate-related regulations. The Biden administration estimated the global cost of emitting CO2 at $120-$340/metric tonne and included it in rules related to cars, trucks, residential appliances, ozone standards, methane emission rules, refineries and federal oil and gas leases. By Michael Ball Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Brazil's inflation accelerates to 5.53pc in April

09/05/25

Brazil's inflation accelerates to 5.53pc in April

Sao Paulo, 9 May (Argus) — Brazil's annualized inflation rate rose to 5.53pc in April, accelerating for a third month despite six central bank rate hikes since September aimed at cooling the economy. The country's annualized inflation accelerated from 5.48pc in March and 5.06pc in February, according to government statistics agency IBGE. Food and beverages rose by an annual 7.81pc, up from 7.68pc in March. Ground coffee increased at an annual 80.2pc, accelerating from 77.78pc in the month prior. Still, soybean oil prices decelerated to 22.83pc in April from 24.36pc in March. Domestic power consumption costs rose to 0.71pc from 0.33pc a month earlier. Transportation costs decelerated to 5.49pc from 6.05pc in March. Gasoline prices slowed to a 8.86pc gain from 10.89pc a month earlier. The increase in ethanol and diesel prices decelerated as well to 13.9pc and 6.42pc in April from 20.08pc and 8.13pc in March, respectively. The hike in compressed natural gas prices (CNG) fell to 3.5pc from 3.92pc a month prior. Inflation posted the seventh consecutive monthly increase above the central bank's goal of 3pc, with tolerance of 1.5 percentage point above or below. Brazil's central bank increased its target interest rate for the sixth time in a row to 14.75pc on 7 May. The bank has been trying to counter soaring inflation as it has recently changed the way it tracks its goal. Monthly cooldown But Brazil's monthly inflation decelerated to 0.43pc in April from a 0.56pc gain in March. Food and beverages decelerated on a monthly basis to 0.82pc in April from a 1.17pc increase a month earlier, according to IBGE. Housing costs also decelerated to 0.24pc from 0.14pc in March. Transportation costs contracted by 0.38pc and posted the largest monthly contraction in April. Diesel prices posted the largest contraction at 1.27pc in April. Petrobras made three diesel price readjustments in April-May. By Maria Frazatto Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Australian firms flag coal phase-out timeline concerns

09/05/25

Australian firms flag coal phase-out timeline concerns

Sydney, 9 May (Argus) — Energy utilities raised concerns that Australia's coal-fired power generation phase-out might be running on an unrealistic timeline, according to submissions to the National Electricity Market (NEM) review consultation process. Utilities AGL Energy, Alinta Energy, Delta Energy, Energy Australia, Origin Energy and Stanwell — which operate 10 of the 20 coal-fired power plants in Australia (see table) — submitted separate recommendations to the consultation launched late last year looking at wholesale market settings. This came after the conclusion of the Capacity Investment Scheme (CIS) tenders in 2027, and as Australia transitions to more renewables from its aging coal-fired plants. The Australian Energy Market Operator (Aemo) forecast the country will exit all coal-fired generation by 2038 in its Integrated System Plan (ISP) published in 2024. But Delta Energy predicts that this timeline will not be met, and views ISP's priority as emissions reduction targets rather than a realistic timeline. Insufficient capacity to replace the coal plants was a common issue flagged by these companies, with AGL saying this is partly because of uncertainty in the market leading to less investments. The utility plans to close all its coal plants by the end of June 2035. AGL was Australia's largest emitter of greenhouse gas emissions in the 2024 financial year, according to the Clean Energy Regulator (CER), followed by Stanwell, Energy Australia and Origin Energy. The transition could be supported using flexible dispatchable resources, according to Origin Energy. The coal phase-out means more variable renewable energy (VRE) is required, but VRE output will not necessarily match demand. "The NEM review must also consider the actions to facilitate the planned retirement of coal-fired power stations from the energy system, which will still be occurring in the NEM beyond the CIS," Stanwell warned. "The urgency of developing solutions cannot be overstated, as any indecision now would result in increased government intervention later, and a disorderly and costly NEM beyond the CIS." Gas-fired generation A few firms view gas-powered generation as critical in the transition away from thermal coal and in maintaining system reliability. It will provide back-up in times of renewable droughts, said Stanwell and AGL, and should be noted in discussions of the forward strategy. But Alinta Energy is cautious of the costs of gas-fired power plants, believing them to be the least costly for customers but not economically viable because of their exposure to global gas market prices. Alinta's suggestion is to reduce the market's dependence on high-cost facilities including gas-fired facilities. Mixed views on capacity market Some companies mentioned a capacity mechanism as a solution. Coal-fired facilities should be allowed to continue until they can be replaced, said Alinta Energy, and gas power plants are necessary. Energy Australia and Delta are calling for the NEM to stay technologically neutral in this process, keeping thermal coal exits in mind. A capacity market needs to be sustainable without government subsidies, Alinta Energy said, and exit strategies for government intervention should be clear from the beginning. But capacity markets can lead to higher costs for customers, according to AGL, because of potential over-procured capacity. "If a capacity mechanism was implemented, it would be important to consider the impact of any capacity incentive on the operation of the NEM and the appropriate level of the market price settings — a balance that may be difficult to strike," AGL noted. The expert independent panel leading the review will continue carrying out consultation, and is expected to make final recommendations to energy and climate ministers in late 2025. By Susannah Cornford Australia coal-fired power plant closures in NEM Plant Capacity ( MW ) Owner Closure date State Emissions CER 2023/24 year Scope 1 & 2 of CO2e Eraring 2,880.0 Origin 2027 NSW 13,550,220.0 Yallourn 1,480.0 Energy australia 2029 Vic 10,502,080.0 Callide B 700.0 CS Energy 2029 Qld 4,028,161.0 Total by 2030 5,060.0 28,080,461.0 Coal plant closures in NEM after 2030 Bayswater 2,640.0 AGL 2030-33 NSW 13,712,719.0 Vales Point 1,320.0 Delta 2033 NSW 7,111,963.0 Stanwell 1,460.0 stanwell 2035 Qld 6,982,204.0 Tarong 1,843.0 Stanwell 2035 Qld 10,936,021.0 Kogan 740.0 CS Energy 2035 Qld 4,522,472.0 Callide C 825.0 CS Energy 2035 Qld 688,038.0 Loy Yang A 2,210.0 AGL 2035 Vic 18,723,707.0 Subtotal 11,038.0 62,677,124.0 Total by 2030 16,098.0 90,757,585.0 — CER Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Permian output could plateau sooner: Occidental CEO

08/05/25

Permian output could plateau sooner: Occidental CEO

New York, 8 May (Argus) — Oil production from the Permian basin could plateau sooner than expected if operators keep talking about reducing activity levels in the wake of lower oil prices, warned the chief executive of Occidental Petroleum. Vicki Hollub said she previously expected to see Permian output growing through 2027, with overall US production growth peaking by the end of the decade. "It's looking like with the current headwinds, or at least volatility and uncertainty around pricing and the economy, and recessions and all of that, it's looking like that peak could come sooner," Hollub told analysts today after posting first quarter results. "So I'm thinking right now the Permian, if it grows at all through the rest of the year, it's going to be very little." Occidental is reducing the midpoint of its annual capital spending guidance for 2025 by $200mn on the back of further efficiency gains. The US independent also plans to trim domestic operating costs by $150mn. "We continue to rapidly advance towards our debt reduction goals, and we believe our deep, diverse portfolio of high-quality assets positions us for success in any market environment," Hollub said. Occidental closed asset sales of $1.3bn in the first quarter and has repaid $2.3bn in debt so far in 2025. Occidental produced 1.4mn b/d of oil equivalent (boe/d) in the first quarter compared with nearly 1.2mn boe/d in the same period of last year. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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