Oil cracking towers stand in the Duna oil refinery, operated by MOL Hungarian Oil & Gas Plc, in Szazhalombatta, Hungary. (Photographer: Akos Stiller/Bloomberg)

China Announces Plan to Form National Oil & Gas Pipeline Company

(Bloomberg) -- China announced it will form a national oil and pipeline company, the first public acknowledgment of the massive energy industry overhaul planned since at least 2014.

The creation of the pipeline company was mentioned in the National Development & Reform Commission’s work report released Tuesday during the annual National People’s Congress meeting, alongside closely watched indicators including economic growth targets and debt reduction goals.

President Xi Jinping’s government has planned for years to spin off into a new company some of the 112,000 kilometers (70,000 miles) of oil, gas and fuel pipelines held by state energy giants, led by China National Petroleum Corp.

“Pipeline reform is a key step toward liberalization of the oil and gas market,” said Neil Beveridge at Sanford C. Bernstein & Co. in Hong Kong, adding that the move is “the biggest reform in decades.”

The formation of a new pipeline company would help reform the energy sector by separating transmission and sales businesses and removing impediments to oil and gas exploration, according to the report. It included no further details of the company or timing of its creation.

©2019 Bloomberg L.P.