Sinopec Opposes PetroChina: Wants to Acquire Xinjiang Coal Gas Resource

Instead of waiting for CNPC to continue to occupy 80% of China's natural gas resources and pipeline transportation, it would be better to break out of the country and kill a new road.

Recently, Sinopec has implemented gas source agreements for coal-to-gas natural gas transmission pipelines with four central enterprises such as China Huaneng, China Huadian, China Guodian and China Power Investment, Wanxiang, Xinjiang Guanghui and Xinjiang Rexy Coal.

According to Sinopec’s report to the “First Financial Daily” reporter, “Xinjiang Coal-to-Natural Gas Pipeline Project” includes the New Yuezhe Zhejiang Pipeline and the Xinlu Pipeline. The designed gas transmission scale is 30 billion cubic meters per year, which is just as recently The scale of China Petroleum's West-East Gas Pipeline Second Line is exactly the same.

Among them, the estimated total length of the new Guangdong-Zhejiang-Zhejiang pipeline, with a total investment of over RMB120 billion, is 7373 kilometers. The gas storage and LNG emergency peaking stations are equipped with the target markets of 13 provinces including Xinjiang, Gansu, Zhejiang and Guangdong and Guangxi. City); Xinlu Pipeline is expected to have a total length of 4463 kilometers, supporting the construction of gas storage (shared with the new Guangdong-Zhejiang-Zhejiang Pipeline), the target market for Henan, Shandong, Hebei, Beijing, Tianjin, Anhui, Jiangsu a total of 7 provinces and cities.

In fact, the market covered by the two pipelines of Sinopec has already coincided with the Sino-Petrol-dominated Shanxi-Beijing pipeline and the West-East Gas Pipeline line. If we compare the new Guangdong-Zhejiang pipeline and PetroChina West-East Gas Pipeline II, we can find that the former pipeline has more “Shandong” and “Fujian” areas than the latter.

It is understood that the new Guangdong-Zhejiang-Zhejiang pipeline may be jointly built by Sinopec, Zhejiang Energy Group, and Xinjiang Investment Development (Group) Co., Ltd. Guo Bo Securities researcher Liu Bo pointed out that Sinopec chose a very special natural gas transmission model: using another company's gas source, and then set up a joint venture pipeline company to transport CBM products that are different from natural gas to the east where the gas is used more. And southern regions.

Liu Bo said: “Sinopec does not have large-scale CBM and natural gas production bases in the north. This resource of coalbed methane has been seen by many power companies and local state-owned enterprises, and has invested heavily in development. Obviously the market has certain With the gas source, CNPC will not give it to Sinopec, assuming Sinopec opens a new natural gas pipeline in Xinjiang and will have no air to lose, but if it can cooperate with upstream and downstream partners through Sinopec's pipeline and energy technology With regard to the advantages, the profits of natural gas will also be obtained through controlling the pipeline."

At present, Sinopec has only one heavy-duty Sichuan-East pipeline, but it is only covering the southern region. A slogan told the reporter that although Sinopec had selected partners such as Guodian and Zhejiang Energy to operate the coalbed methane business, Sinopec is currently focusing on the profits of the “pipeline transport” industry, which has not yet been completely eroded by PetroChina.

In the next step, Sinopec can take over the acquisition of resources of multiple coal gas companies in Xinjiang, and choose to directly enter provincial provinces for the construction of provincial branches and shareholdings in various provinces, thereby realizing the full range of gas resources, pipeline transportation and downstream transportation of coalbed methane. Profits will benefit Sinopec's gas segment revenue and profits. According to open sources, there are more than 20 coal gas projects in Xinjiang that have already done the preliminary work and started. After these projects are completed and put into production, the annual production capacity will reach 76.7 billion cubic meters.

Of course, Sinopec still has a lot of problems to solve: The first is whether terminal companies such as local gas companies in various provinces and cities will accept more than one times more coal gas than natural gas. Secondly, if the pipeline price of China Petroleum’s West-East Gas Pipeline No.2 or even three- and four-wire pipelines is lower than Sinopec, it is possible that some upstream coal gas companies that have signed an agreement with Sinopec will change their flag and choose CNPC as their Pipeline delivery side. Therefore, how to retain the air supply and downstream market development will be an important part of the success of Sinopec's coal gas business strategy.