The Chinese government is reportedly planning to create a new oil and gas pipeline company in an effort to break up the monopoly held by its three largest energy firms.
According to Reuters, the state owned China Securities Journal reported last Thursday that the government has established a plan to found a new pipeline company and is moving forward with the plan in incremental steps.
The new company would introduce more competition into China’s oil and gas industry that is currently dominated by state owned China National Offshore Oil Corp, China National Petroleum Corp and Sinopec Group.
The move is a part of the Chinese governments efforts to overhaul state owned companies and attract more domestic private investment to the energy sector.
In 2013, China’s National Development and Reform Commission announced plans to break up CNPC’s grip on the country’s transportation assets and establish a number of pipeline enterprises to share the business.
At the time, CNPC controlled 70 percent of oil pipelines and 90 percent of natural gas pipelines in the country.
Last September, Sinopec sold a 30 percent stake in its retail business worth $1.75 billion to 25 financial firms, Reuters noted.
According to the U.S. Energy Information Administration, China was the fourth largest petroleum and liquids producer in 2014 when it pumped about 4.572 million barrels per day.
China is the second largest consumer of oil in the world and became the largest net importer of oil in 2014 as the country’s largest fields reach maturity.
The EIA projects China will account for more than a quarter of the global oil consumption growth in 2015.