Natural gas industry chain analysis

At first, the factory-gate price of each gas field was submitted to the National Development and Reform Commission for review, and the Commission determined the benchmark price of natural gas according to the cost plus reasonable profits and taking into account the affordability of end users. After 2013, the state no longer took the factory-gate price of natural gas as the supervision link, but took the gate price formed by adding factory-gate price to pipeline transmission fee as the key control price. The ex-factory price is based on the gate price minus the intermediate pipe transmission fee, so the price of this link is currently an indirect control price. Although the control link is transferred downward, the cost relationship of natural gas produced in major gas fields in China can be judged from the ex-factory benchmark price as follows: Xinjiang oil fields < Qinghai oil fields < Changqing oil fields < Chuanyu gas fields < other gas fields.

2. Gas imports

(1) China has basically formed four natural gas import channels, of which gas is mainly imported by pipeline

Imported natural gas is mainly imported into China through land international pipelines and sea ships. It is expected that in 2019, after the eastern route of the China-Russia natural gas pipeline is completed, China's natural gas imports will form four major import channels in the northwest, southwest, northeast and east, of which the eastern channel mainly imports LNG from Australia, Qatar, Malaysia, Indonesia and other places, mainly liquefied natural gas imports, and gaseous natural gas imports mainly pipeline imports. Pipeline imports are mainly northwest, southwest and northeast import channels, which are respectively undertaken by Central Asia Pipeline, China-Myanmar Pipeline and China-Russia pipeline. After the import pipeline enters China, it is connected with the domestic backbone pipeline and transported to the main consumption area. After entering Xinjiang, Central Asia Pipeline Lines A, B, C and D are directly connected with the second, third and fifth lines of West-East gas transmission, and spread eastward to the eastern gas use area; After entering Guizhou, the China-Myanmar Pipeline intersects with the Guangnan Branch of West-East Gas Transmission Line and the China-Guizhou Line, which mainly supplies Yunnan, Guizhou and Guangxi gas consumption areas. The starting point of the China-Russia pipeline construction in China is Heilongjiang, through Jilin, Inner Mongolia, Liaohe, Hebei, Tianjin, Shandong, Jiangsu, and finally arrive at the domestic pipeline part of Shanghai, which can supply imported pipeline gas to the Beijing-Tianjin-Hebei region, the Yangtze River Delta and other provinces and cities around Shanghai. Diversified imported natural gas to a large extent to supplement China's natural gas supply gap, while enhancing China's energy security.

(2) The pipeline gas import project has a long cycle and a large investment scale, and usually needs to sign a long agreement

In the import link, due to different forms of natural gas transport, investment scale is different, resulting in different business models. The process of pipeline natural gas import project includes: signing gas supply agreement, pipeline construction, gas supply. Because the pipeline planning and construction period is long, the investment scale is large, the specificity is strong, and the whole gas supply process needs 3 to 5 years to open up, so the two sides will sign a long-term agreement at the beginning of the project, the agreement period is usually 20 to 40 years, the contract should lock the transaction scale and transaction price, and even the two sides will invest in the construction of pipeline facilities. In order to prevent the gas supplier and the demand side from breaking the contract during the pipeline construction process and affecting the continuity of the entire project, and ensure the demand side has a stable gas source, the project investment funds of both sides can recover the cost in the subsequent transaction. At the same time, due to the above reasons, the main player in China's import of pipeline gas is CNPC. The growth rate of pipeline gas imports is relatively stable, with a growth rate of 8.80% in 2017, and the import volume accounts for 18% of the overall natural gas supply. With the continuous operation of pipelines under construction, the future import pipeline gas volume will continue to increase.

(3) The price of imported pipeline gas is greatly affected by the long-term agreement signed in the early stage

The import price of pipeline gas is composed of the cost of gas source and the international pipeline transportation fee (which is levied by the pipeline investor). Because the price of imported pipeline gas is determined by the long-term agreement signed when the natural gas price was high, the gas price is high. Although CNPC has not publicly disclosed the specific gas supply prices in the long-term agreement signed with various gas suppliers, the import unit price calculated according to the import volume and import amount of pipeline gas on the website of China Customs shows that the price of imported pipeline gas since 2017 is 1.25 yuan/cubic meter ~1.40 yuan/cubic meter, which is higher than the ex-factory price of major domestic gas fields. After imported pipeline gas enters the domestic pipeline, it is priced according to the domestic pipeline gas pricing method and guided by the benchmark gate price, so the import price and market price are often inverted, resulting in huge losses in the imported pipeline gas and pipeline transportation business of petrochina in recent years, which also makes fewer enterprises enter the imported pipeline gas segmentation field.