China expected to raise city-gate gas prices nationwide in March

24 January 2013 08:48  [Source: ICIS news]

SINGAPORE (ICIS)--China is expected to raise city-gate prices of natural gas at the provincial level by yuan (CNY) 0.50-0.70/cubic metre (cbm) ($0.08-0.11/cbm) as early as March, a source close to PetroChina said on Thursday.

The new pricing scheme is expected to adopt the “one price for one province” principle, taking into account the affordability levels at different cities, the source added.

An industry expert said that local provincial governments may apply differentiated price adjustments for city-gas companies or consumers who are vulnerable to a price hike.

Prices for such companies will be adjusted in two categories – namely natural gas supplied within a quota and consumption of volumes that exceed the quota, the industry expert added.

Moreover, there may be different prices for natural gas supplied to gas liquefaction facilities and the adjustments will be based on the year the supply contracts were signed, according to liquefied natural gas (LNG) producers.

For example, the price may increase by CNY0.20/cbm if a LNG producer signed the supply contract before 2010, but the price may increase by more than CNY0.20/cbm after 2010, they said.

China increased the ex-works prices of natural gas produced by onshore gas fields by CNY0.23/cbm in June 2010.

($1= CNY6.22)

By: Jane Han

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