The National Development and Reform Commission (NDRC), China’s top economic regulator, plans to take out the pipeline business monopolized by state oil giants, put it under government supervision and establish a number of pipeline enterprises to share the business, according to the latest reform proposal submitted by the Development Research Center of the State Council, a Chinese government think tank.

The China National Petroleum Corporation (CNPC), the country’s biggest oil producer, stands at the core of reform and will lose its pipeline business, the 21st Century Business Herald reported, citing sources close to the NDRC.

Meanwhile, China’s National Energy Administration is seeking advice on the newly drafted administrative measures for oil and natural pipelines management, which encourages private investors to join the pipelines business.

CNPC currently controls 70 percent of oil pipelines and 90 percent of natural gas pipelines in the country, blocking other state players and private investors from entering the business.

The company has been reluctant to give up its pipeline network, citing enormous construction costs and a complicated shareholding structure.

CNPC was the target of a high-profile corruption probe launched in late August when several former and incumbent executives were detained by disciplinary authorities. The corruption scandal prompted reform initiatives to break CNPC’s monopoly over the country’s oil industry and curb mismanagement in state-owned enterprises.


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