PetroChina Coalbed Methane

PetroChina Company Limited

File:PetroChina logo.svg Logo of PetroChina
Company type	Public
Industry	Oil and gas
Founded	November 5, 1999 (1999-11-05)
Headquarters	Beijing , China
Area served	Asia, North America, Europe
Key people	Li Zhiming (subsidiary leader in Calgary)
Products	Oil, natural gas, petrochemicals, refining
Parent	China National Petroleum Corporation (CNPC)
Website	www.petrochina.com.cn

PetroChina Company Limited () operates as a Chinese oil and gas enterprise and serves as the publicly traded subsidiary of the state-owned China National Petroleum Corporation (CNPC). Its headquarters are located in Beijing's Dongcheng District. Recognized as Asia's foremost producer in the oil and gas sector, PetroChina holds a significant position in the industry. The company is listed on the Hong Kong Stock Exchange and was previously traded on the New York Stock Exchange. In November 2007, PetroChina announced intentions to offer shares on the Shanghai Stock Exchange, subsequently becoming part of the SSE 50 Index. According to the 2020 edition of the Forbes Global 2000, PetroChina ranked as the 32nd-largest publicly traded company worldwide.

History

Established on 5 November 1999 as a joint stock company with limited liability under Chinese corporate law, PetroChina emerged from a restructuring of CNPC by transferring most assets and liabilities associated with exploration, production, refining, marketing, chemical manufacturing, and natural gas operations.

In 2005, following concerns about Sinopec’s ties to Sudan through its parent company China Petrochemical Corporation, major institutional investors such as Harvard and Yale divested from Sinopec. Subsequent divestment campaigns related to Sudan shifted focus toward PetroChina. For example, in 2007, Fidelity Investments sold off 91% of its PetroChina ADR holdings after activist investor pressure.

In May 2007, PetroChina revealed what was hailed as China’s largest oil discovery in a decade at the Jidong Nanpu oil field located in Bohai Bay; however, estimates for this find were revised downward by 2008.

PetroChina was incorporated into the Hang Seng Index on 7 November 2007, effective from 10 December that year. Concurrently, the company encountered international criticism due to its commercial dealings with Sudan during the Darfur crisis.

On 19 August 2009, PetroChina entered a landmark agreement valued at A$50 billion with ExxonMobil to procure liquefied natural gas (LNG) from Australia’s Gorgon field over a 20-year period. This contract represented China’s largest acquisition of cleaner energy sources at that time despite diplomatic tensions between Australia and China.

The Dushanzi refinery commenced full-scale operations on 24 September 2009. As China’s largest refinery facility with an annual throughput capacity of 10 million tons of crude oil and one million tons of ethylene, it plays a strategic role in supporting China’s oil imports from Kazakhstan.

In February 2011, PetroChina expanded its footprint in North America by purchasing a 49% interest in Canadian Duvernay shale assets from Encana for $5.4 billion. This transaction marked China’s most significant investment in shale gas to date. The Canadian operations are managed through its subsidiary based in Calgary under the leadership of Li Zhiming.

By 2016, China formalized an agreement with Nepal Oil Corporation to supply approximately 30% of Nepal’s petroleum demand while planning pipeline construction and storage facility enhancements.

PetroChina experienced a share price increase in 2017 following a rise in natural gas prices applicable to commercial consumers.

In February 2019, via its joint venture Arrow Energy with Royal Dutch Shell, PetroChina secured $10 billion AUD leases for development of the Surat gas project located in Queensland. Additionally, in May that year, PetroChina’s Liaoyang Petrochemical division exported diesel fuel to Europe for the first time. The company reported profits amounting to US$4 billion for fiscal year 2019.

By the year 2023, PetroChina had received roughly US$343 million in government subsidies.

During 2022, PetroChina accelerated its renewable energy initiatives by installing a combined capacity of 5.36 GW in wind and solar power and advancing geothermal projects spanning an area of 11.2 million square meters within the first half of the year. This expansion followed an interim earnings increase of 55.3% compared to the previous year.

PetroChina Pipelines

PetroChina Pipelines, a subsidiary with a 72.26% stake held by PetroChina, was responsible for overseeing the initial three pipelines of the project.

History

The construction phase commenced in 2002, with trial operations starting on 1 October 2004 and full-scale commercial delivery beginning on 1 January 2005. This pipeline is both owned and operated by PetroChina West–East Gas Pipeline Company. Originally, PetroChina intended to retain a 50% share, while Royal Dutch Shell, Gazprom, and ExxonMobil were each expected to hold 15%, and Sinopec 5%. Nevertheless, in August 2004, PetroChina withdrew from the joint venture agreement after failing to reach an accord with the other parties.

Technical features

Stretching from Lunnan in Xinjiang to Shanghai, the pipeline passes through 66 cities across ten provinces. Its primary function is to supply natural gas for power generation within the Yangtze River Delta region. The pipeline’s annual throughput capacity is , constructed at an investment of US$5.7 billion. By the conclusion of 2007, capacity was projected to rise to , facilitated by the installation of ten new compressor stations and enhancements to eight existing ones.

Connections

This pipeline connects with the Shaan-Jing pipeline through three branch lines. The Ji-Ning branch, linking Qingshan and Anping Distributing Stations, commenced service on 30 December 2005.

Source of supply

The main source of gas originates from the Tarim Basin oil and gas fields located in Xinjiang, with secondary supplies drawn from the Changqing region in Shaanxi. Future plans include integration with the proposed Kazakhstan-China gas pipeline.

Since 15 September 2009, this pipeline has also been transporting coalbed methane extracted from the Qinshui Basin in Shanxi.

West–East Gas Pipeline II

Construction work for the second West–East Gas Pipeline kicked off on 22 February 2008. Covering a total length of —including a main line and eight feeder lines—it extends from Khorgas in Xinjiang to Guangzhou, Guangdong. Up to Gansu province, it runs parallel and interconnects with the first pipeline. The western segment was slated for operation in 2009, followed by the eastern section by June 2011.

Engineered for an annual capacity of , this pipeline’s primary supply source is the Central Asia-China gas pipeline. The project carries an estimated cost of US$20 billion and is developed by China National Oil and Gas Exploration and Development Corp. (CNODC), a joint enterprise between China National Petroleum Corporation and PetroChina.

West–East Gas Pipeline III

Initiated in October 2012, construction of the third West–East Gas Pipeline was planned for completion by 2015. It runs from Horgos in western Xinjiang to Fuzhou in Fujian, traversing Xinjiang, Gansu, Ningxia, Shaanxi, Henan, Hubei, Hunan, Jiangxi, Fujian, and Guangdong provinces.

The total length measures , consisting of a main trunkline and eight branches. The development includes three gas storage facilities as well as a LNG plant. Designed for an annual throughput capacity of , it operates at a pressure of . Supply sources encompass Line C of the Central Asia–China gas pipeline, the Tarim basin reserves, and coalbed methane deposits in Xinjiang. Compressor units are provided by Rolls-Royce.

Chemical spills

In November 2005, an explosion at a PetroChina chemical facility in Jilin resulted in the discharge of 100 tons of benzene, a known carcinogen, into the Songhua River, generating a chemical slick extending 80 kilometers. This contamination compelled Harbin to suspend water supply services affecting nearly four million inhabitants for a duration of five days. The accident led to more than 60 injuries, five fatalities, and one individual reported missing. The pollution spread as far as Khabarovsk, Russia, where officials faced challenges in maintaining water safety standards.

PetroChina was fined one million yuan (approximately $125,000), the highest penalty permitted under Chinese environmental regulations, by the nation's environmental authorities. Cleanup operations were projected to cost around $1 billion. At the time, Foreign Minister Li Zhaoxing publicly apologized to Russia for the incident. The response to the crisis drew criticism from Chinese media outlets regarding government management.

In 2014, Lanzhou Petrochemical, a PetroChina subsidiary, was accused of leaking ethylene and ammonia, contaminating water with benzene, and causing air pollution in Lanzhou. Local government officials issued formal reprimands and demanded an official apology from the company.

The "Western Gas to the East" Pipeline Project

PetroChina’s exploitation of natural gas reserves in the Tarim Basin, Xinjiang has sparked debate due to environmental concerns associated with the initiative.

Demonstration at Chengdu plant

In 2008, PetroChina commenced construction on a petrochemical complex in Chengdu valued at $5.5 billion, designed to produce 800,000 tons of ethylene and process 10 million tons of crude oil annually. Despite allocating $565 million for environmental safeguards, local residents organized protests on May 3–4, 2008, expressing concerns over potential pollution hazards. These demonstrations were peaceful and saw limited government intervention.

Trade anomalies

On January 19, 2022, Chinese authorities sanctioned PetroChina’s subsidiary "PetroChina Fuel Oil Co Ltd" due to irregularities in oil trading practices that disrupted market stability, promoted inefficient expansion of refinery capacity, and indirectly resulted in losses to government tax revenues, as reported by the National Development and Reform Commission.

Human rights

In 2011, EarthRights International accused PetroChina of involvement in grave human rights violations within Burma, a nation recognized for utilizing forced labor to support military-driven economic objectives.

Corruption

In September 2013, Jiang Jiemin, the ex-chairman of PetroChina, was dismissed from his role as director at the State-owned Assets Supervision and Administration Commission of the State Council and subjected to a corruption and power abuse investigation alongside four other senior executives within the oil sector. Jiang, who had connections to the disgraced former security chief Zhou Yongkang, was convicted in October 2015 for bribery, illegal possession of assets, and misuse of authority, resulting in a 16-year prison term.

In January 2017, former vice chairman Liao Yongyuan received a 15-year sentence after being found guilty of abusing power and accepting bribes amounting to nearly $2 million. Later, in October 2021, the Central Commission for Discipline Inspection declared an inquiry into former vice president Ling Xiao concerning serious violations of party discipline.

Tax issues

In January 2014, the International Consortium of Investigative Journalists exposed that CNPC, PetroChina, Sinopec, and CNOOC utilized offshore shell companies registered in the British Virgin Islands as a means to evade taxes.

Ranking

PetroChina was positioned 30th on the 2018 Forbes Global 2000 list, which ranks the world's leading publicly traded companies. The company advanced to 22nd place in 2019 and climbed further to 18th in the 2023 edition, highlighting its expanding influence on the global stage.

Corporate bonds

On October 24, 2008, PetroChina issued medium-term corporate bonds totaling 80 billion yuan (approximately $11.7 billion), constituting the largest bond issuance by a domestic listed firm at that time.

Logo

Since 2004, PetroChina’s emblem has depicted a rising sun above a petal-inspired design rendered in red and yellow—colors traditionally associated with prosperity in Chinese culture. This symbol embodies the company’s ten principal business segments alongside its strategy for worldwide expansion. The red foundation reflects solid fundamentals and unity, while the floral element signifies PetroChina’s dedication to balancing energy production with environmental stewardship. The ascending sun portrays the company’s aspiration toward a thriving future.

See also

• China Petrochemical Corporation
• China National Offshore Oil Corporation
• Natural Gas Industry

Sources

• 2004 Annual Report, pp. 135, 137
• McGregor, Richard. The Party: The Secret World of China's Communist Rulers. Harper Perennial: New York, 2012. . Originally published in 2010 by Allen Lane, a Penguin Books imprint.