PetroChina inks 1st natural gas distribution agreement

Oct. 3, 2008 (China Knowledge) - PetroChina<601857><857>, the country's largest oil and gas producer, has signed its first natural gas distribution agreement, in which it will be responsible for selling natural gas distributed through the pipeline from Burma to Yunnan province, sources reported.

Under the agreement, PetroChina's subsidiary PetroChina Kunlun Gas Ltd (51%) along with three local companies, namely Kunming Cola Gas Ltd (20%), Yunnan Investment Group (20%) and Yunnan Changan Investment Corp (20%) will incorporate a joint venture, which is set to provide urban natural gas distribution services to Kunming city, according to a spokesman at Kunming Coal Gas.

The spokesman said this move will enable PetroChina to expand into urban gas distribution business and cross-border natural gas pipeline between China and Burma.

The Sino-Berman natural gas pipeline is expected to start operation in the first half of 2010 with a capacity of 10 million cubic meters, a local newspaper cited Hu Zhaoke, vice president of Kunming Cola Gas, as saying.

Reportedly, PetroChina's parent China National Petroleum Corporation (CNPC) had signed a memorandum of understanding (MOU) with a financial group led by Daewoo International Corp in June to buy natural gas from two mining blocks in Burma.