PetroChina, PipeChina Launch $3.6 Billion Gas Storage Projects to Boost Capacity

The projects will add nearly 11 Bcm of working gas capacity as China strengthens its natural gas infrastructure and supply security.

(Reuters) — PetroChina and state-owned China Oil and Gas Pipeline Network Corp. (PipeChina) established two gas storage companies this week in China, the Tianyancha company information database showed.

The oil and gas major's investment arm and PipeChina's research and technical service company registered Liaohe Gas Storage in northeast China and Xinjiang Gas Storage in northwest China on Nov. 24 and Nov. 27, respectively.

The two new entities were set up with a total registered capital of more than 25.6 billion yuan ($3.62 billion), with Liaohe Gas Storage primarily engaged in loading, unloading, and storage operations, and Xinjiang Gas Storage primarily engaged in natural gas production and supply, the database showed.

PetroChina proposed the transactions in August to acquire the two companies this week, along with Xiangguosi Gas Storage in southwest China, from its controlling shareholder, state-owned China National Petroleum Corporation, in a deal worth 40.02 billion yuan, an exchange filing in August showed.

The deal comes as China's biggest oil and gas producer looks to ensure stable operations and expand its natural gas industrial chain.

It is estimated to add 10.97 billion cubic meters of working gas storage capacity to its portfolio, the exchange filing showed.

($1 = 7.0812 Chinese yuan renminbi)