The China National Energy Administration (the "NEA") promulgated the Measures for Regulation of Fair and Open Access to Oil and Gas Pipeline Networks (油气管网设施公平开放监管办法(试行)) (the "Measures") on 13 February 2014. The Measures, which came into effect on the same day, are a trial version with a validity period of 5 years. As the construction and operation of oil and gas pipelines in China have been dominated by the state-owned enterprises, the Measures demonstrate that China has taken a major step forward in liberalising its oil and gas market.
According to the Measures, operators of oil and gas pipeline networks and facilities (the "Operators") shall equally open its oil and gas pipeline networks and facilities to third parties if they have surplus capacity. However, the Measures do not define or provide any detailed standards for defining the "surplus capacity".
The Measures also provide that the third parties may access not only the pipelines of crude oil, refined oil and natural gas but also the supporting facilities related to conveyance, storage, gasification, liquefaction and compression of oil and gas. The third parties, which may be the Operators, the upstream users of the Operators (for example, the oil and gas production enterprises and trading enterprises) and the downstream users (for example, the oil and gas retailers and end users) shall all be incorporated in China. The third parties shall file the application for the access to the oil and gas pipeline networks and facilities with the Operators directly. Where the Operators refuse to open the oil and gas pipeline networks and facilities, their refusal and the statements of relevant reasons shall be copied to the NEA. In addition, the NEA may play a role of "coordination and mediation" in the disputes between the parties.
