China’s natural gas gamble won’t replicate US shale success
As part of China’s ambitious goal to wean itself off coal, China Petroleum & Chemical Corp. has announced plans to sell half its stake in a major cross-country natural gas pipeline, in a bid to raise capital and to fund exploration.
Sinopec, as the company is commonly known, is looking to divest 50 percent of the trans-China pipeline, which connects gas fields in the western province of Sichuan to cities on the eastern seaboard. In a filing with the Hong Kong Stock Exchange on Aug. 2, the state-owned natural gas giant did not specify a timeline or a targeted valuation for the sale.
Despite declining profits and a global natural gas glut, the asset sale will fund new projects in shale gas extraction as Sinopec looks to meet the ambitious target of doubling its gas production within five years. China is betting big on a shale gas boom to decrease its dependency on coal and foreign gas imports.