China to debut pipeline natural gas transport rates

China plans to launch transport rates for domestic pipeline natural gas (PNG) for the first time from 1 January 2024, China's main economic planning agency the NDRC said on 5 December.

These transport rates for PNG are inclusive of 9pc value-added tax. Total PNG transport prices are calculated based on the transport distance between the gas' entry and exit points. There are two main variables in the formula — the volumes being sent through in km³, and the distance between the start and end points in km. So to obtain the transport price for a certain amount of PNG being sent through any of China's pipelines, one would take the transport rate multiplied by volumes of gas sent in km³ and multiplied again by the distance between the start and end points in km.

The number of interprovincial PNG transport prices has also been reduced from 20 to four, in a bid to simplify pricing in the pipeline gas market and increase transparency. This will also promote the free flow of natural gas resources and increase market competition, the NDRC added.

The transport rate for China's middle east region is Yn0.2783/km³-km. This rate is applicable across 28 pipelines, which mainly supplies to most coastal provinces in the country and central China.

The transport rate for the northwest region is Yn0.1262/km³-km. This rate is applicable across six pipelines, which mainly supplies to the provinces of Xinjiang, Qinghai and Gansu.

The transport rate for the northeast region is Yn0.1828/km³-km. This rate is applicable across five pipelines, which mainly supplies to northeast China and parts of Hebei province.

The transport rate for the southwest region is Yn0.3411/km³-km. This rate is applicable to only the China-Myanmar line which brings pipeline gas supply from Myanmar to the provinces of Yunnan and Guizhou.

The above listed pipelines are all managed by state-owned operator PipeChina.