China's Petrochina Eager For Reform

August 23, 2013

PetroChina Co Ltd, the nation's leading oil and natural gas producer, said on Thursday it expects a 20-billion-yuan ($3.3 billion) annual profit boost from the government's natural gas price reform.

That inflow will further buoy the State-owned company's natural gas business, which saw a surge in first-half profit.

The National Development and Reform Commission, the top economic planning agency, said last month it would raise the government-set wholesale price of natural gas by 15 percent to a national average of 1.95 yuan per cubic meter.

Wang Dongjin, PetroChina's new president, said the company is pushing the government to raise the price as soon as possible, which would help PetroChina generate an additional 10 billion yuan in the second half.

The higher price will only apply to non-residential users. Wang said that household prices won't change, for now.

Even with the price hike, domestic natural gas will still be cheaper than imported fuel. Liquefied natural gas shipments into Asia are running at about 50 US cents per cubic meter.

"A marketized natural gas price is without a doubt good news for PetroChina," said Wang during a news conference in Hong Kong, after reporting a 5.6-percent first-half profit increase to 65.5 billion yuan.

Revenue in PetroChina's natural gas and pipeline business increased 7.7 percent in the first half, to 105.6 billion yuan, on higher demand.

Copyright, China Daily, 2013.