BEIJING�Russia's natural gas company Gazprom is keen to participate in the construction of China�s longest natural gas pipeline, to stretch between Xinjiang and Shanghai. Though PetroChina Co. Ltd. has stated it would welcome foreign investment, Gazprom's enthusiasm has not been met with a positive response from PetroChina.
The company is unlikely to consider Gazprom as a partner because, it said, Russia is not technologically sophisticated enough and has limited financial resources.
The 4,167-km pipeline linking Xinjiang and Shanghai is spearheaded by PetroChina and construction will start next year. The Chinese government is encouraging suitable foreign investors to take a majority share in the project.
Oil majors, including BP, Royal/Dutch Shell Group and Enron Corp., are unlikely to invest in the construction, however, because of concerns about a long payback period and uncertainty about the gas market in Shanghai. No foreign companies have made a commitment to the pipeline investment.
As a result, PetroChina is likely to go it alone without foreign investment. The company is confident of having the technological expertise and financial strength to complete the 39.28 billion yuan project.
