Seven bid for PetroChina pipeline stakes

Seven consortia or companies have submitted bids to PetroChina Co. Ltd. to participate in the construction of a major natural gas pipeline.


By an OGJ Online Correspondent

BEIJING, May 22 -- Seven consortia or companies have submitted bids to PetroChina Co. Ltd. to participate in the construction of a major natural gas pipeline.

Previously, 19 had indicated an interest (OGJ Online, May 22, 2001).

The seven are a consortium comprising BP Global Investments Ltd., Mitsubishi Corp., Itochu Corp., and Nissho Iwai Corp. of Japan and Petronas of Malaysia; Shell International Gas Ltd.; Consortium Energomachesport Russia; a consortium made of ExxonMobil China Tarim Basin Gas Ltd. and CLP Enterprises Ltd.; OAO Gazprom; Hong Kong & China Gas Co. Ltd.; and Houston Inspection International Inc.

They are bidding for stakes in the 4,000-km gas pipeline linking China's Xinjiang in the northwest and Shanghai in the east.

Gaz de France, Marubeni Corp., Mitsui & Co., Sumitomo Corp., Total Fina Elf SA, and United Technologies Corp. have dropped out of the bidding process.

PetroChina is expected to announce a shortlist of bidders in June or July and will submit it to the government for approval.

The company is evaluating the bid proposals, which will be followed by negotiations with each of the bidding companies.

Construction of the 2,610-mile pipeline is slated to start in the second half of 2001. Completion is expected in the second half of 2003. An individual foreign investor or consortium would be allowed to take a majority stake in the $4.8 billion pipeline.

PetroChina will offer additional investment opportunities in natural gas development in Xinjiang as an incentive to attract investment in the pipeline project. The government recently approved six gas blocks in Xinjiang's Tarim basin for foreign investment.

In February, PetroChina signed letters of intent with 33 companies involving 35 projects in the eastern provinces to purchase Xinjiang gas.

The 35 projects will need 9 billion cu m of gas a year by 2005, expandable to 13 billion cu m a year by 2007.

The company will sign take-or-pay contracts with gas users before the construction starts.

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