Research On China’s Third Party Access To Gas Pipelines

Natural gas pipeline network is the main form of transport. According to the different stages, onshore natural gas pipeline network can be divided into the pipeline network and distribution pipeline network. Compared with distribution pipeline network, gas pipeline network has more obvious natural monopoly characters. So third-party access to gas pipeline network is essential. However, there is problem of vertically integrated monopoly in China’s current natural gas industry. State-owned enterprises dominate gas production, transportation and wholesale areas, which severely restrict third-party access to the pipe network. "Measures on Open and Fair Access to Oil & Gas Pipeline Facilities(Trial)" opened the fair and open China’s pipeline facilities. According to the "Rules" transport network will be open only when the pipelines company has extra capacity. Besides, state-owned enterprises have a strong position.However, third-party network access system is a major significance for China, and it even affects the success of China’s energy production revolution. Natural gas has become the best choice for contemporary Chinese life to achieve energy revolution.However, according to the IEA statistics of China’s conventional natural gas reserves are not rich. According to China’s Ministry of Land Resources of China has a lot of unconventional gas- shale gas. Therefore shale gas will provide a guarantee for China’s natural gas supply. But technology breakthroughs are needed to achieve large-scale exploitation of shale gas. US experience shows that SMEs can achieve China’s shale gas revolution. But SMEs have no access to pipeline network. This is a major barrier for SMEs to invest in shale gas.But from an international point of view, the pipe network is not independent overnight. The need to build a lot of the transport network to meet the needs of ordinary people while driving gas consumption results in monopoly in natural gas industry.Therefore, it is necessary for China to go from vertically integrated monopoly to a third-party network access. It is more feasible for China to advance from negotiated third party access to regulatory third party access. To achieve the introduction of third party access, three dimensions need to be transformed. First, the monopoly in gas upstream exploration and development needs to be broken. Secondly, after the other companies enter the upstream area, a fair competition between SOEs and SMEs should be realized. Again, regulators should place price controls on pipeline companies since the pipeline network has characters of natural monopoly.American and British experience suggests that upstream of natural gas market can be introduced into competition. While the British experience shows that laws are necessary to achieve transformation of government. The US and UK experience also shows that an independent regulatory body for the natural gas market is a must. However, to achieve self-transformation of government is very difficult. Laws are important to push the government to transform.This article is mainly about the third party access regime of the pipe network. The article analyzes the meaning of third-party access system, and the need to achieve it. Through the analysis of natural monopoly theory, control theory and analysis of compulsory contracting, the theoretical basis for third party access is clear. The introduction of third-party access means breaking administrative monopoly; state enterprise reform and transformation of government regulation. Formulation and revision of relevant laws will be necessary to third party access regime. This article will also provide a reference to improve China’s energy-related laws and regulations.Third-party access to gas pipeline network is the theme of the thesis. The article is divided into six parts. The first part explains the rational of third-party access system, including the connotation of the system, the theoretical basis and development status. The second part explains the significance of third-party pipeline network access for Chinese energy production revolution. The third part analyzes the construction of China’s third-party access system. The fourth part reviews the history of the United States and Britain’s third party access system development. The fifth part provides advice and recommendations to the relevant laws. Section 6 concludes. Private enterprises have the entrepreneurial spirit and creativity. They will help China to achieve a breakthrough in shale gas exploration and development.