PetroChina and PipeChina Launch $3.6 Billion Gas Storage Joint Ventures

PCCYF +5.45%

China’s PetroChina and state-owned pipeline operator PipeChina have jointly established two major gas storage companies, part of Beijing’s broader effort to expand natural gas capacity and stabilize energy supply amid growing demand.

According to corporate registration data, the new ventures — Liaohe Gas Storage in northeast China and Xinjiang Gas Storage in the northwest — were officially set up this week with combined registered capital exceeding 25.6 billion yuan ($3.62 billion). Liaohe will focus on storage and logistics, while Xinjiang will handle gas production and supply.

The move follows PetroChina’s earlier proposal to acquire these assets, along with the Xiangguosi Gas Storage in southwest China, from its parent company CNPC in a 40.02-billion-yuan ($5.65 billion) deal. Once complete, the transactions will add nearly 11 billion cubic meters (bcm) of working gas storage capacity to PetroChina’s portfolio, marking a significant expansion of its domestic infrastructure.

China’s Rapid Rise in Gas Storage Capacity

China has made the largest gains in underground gas storage (UGS) capacity globally since 2022, according to a new International Gas Union (IGU) report. The country added 6 bcm of new capacity, lifting it to sixth place worldwide, behind the U.S., Russia, Ukraine, Canada, and Germany.

The IGU noted that while gas storage growth in developed markets has plateaued, China continues to expand aggressively, viewing gas as both a bridge fuel for its energy transition and a safeguard against volatile global LNG prices.

Securing Supply and Reducing Volatility

By bolstering domestic storage, Beijing aims to reduce reliance on imported spot LNG cargoes — a key vulnerability during global energy price swings. Earlier this year, PetroChina’s purchase of CNPC’s storage assets consolidated control over a vital segment of the gas value chain, enhancing its ability to manage seasonal demand surges.

China’s first underground salt cavern gas storage facility, recently expanded and operational, further strengthens the nation’s resilience to winter demand spikes.

With natural gas positioned as a transitional energy source, China’s growing storage capacity underlines its strategy to ensure reliability, affordability, and supply security in an era of fluctuating global markets.

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