LNG Terminals in China – Project Development, Third Party Access and Foreign Investment Issues

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This article was written by George Zhao, Michael LawsonDavid Phua and Haoqing Zhang.


As the world's largest consumer of energy, with the recently-achieved status of the top natural gas importer in the world, China[1] has seen continued growth in the demand for liquefied natural gas ("LNG") imports. This has been a key focus of industry participants and an important driver for expansion of the international LNG industry. 

Concurrently, China's need to expand and optimise the utilisation of LNG receiving infrastructure (including terminals and send out pipelines) has assumed central importance in the overall scheme of its energy sector transformation and its tilt towards natural gas as a cleaner fuel source. These plans raise a variety of questions about the general regulatory regime, as well as the availability of third party access and foreign investment in the terminal sector.

In this article, we consider:

  • the rise of China as one of the world's largest LNG importers, and the domestic policy background promoting the growth of natural gas use and the development of LNG terminals;
  • the current status of China's LNG terminals;[2]
    • the regulatory approval process for development of new LNG terminals in China;
    • third party access issues for LNG terminals from a regulatory perspective; and
    • certain key investment issues for foreign investors proposing to invest in China's LNG terminals in partnership with local companies.

A detailed discussion of these issues is beyond the intended scope of this article. However, we hope it provides some useful insights into the early steps being taken to open up China's LNG terminals and gas pipeline network, and key issues for potential foreign (and domestic) investors in the terminal sector.  

General overview

Rise of China as one of the world's largest LNG importers

In 2018, China became the world's largest importer of natural gas[3] and second largest importer of LNG[4] (overtaking Korea), with LNG accounting for almost 60% of China's overall gas imports. This 2018 LNG import volume represented a rise of almost 38% from the previous year.[5] Given the impressive increase in natural gas demand, some industry commentators have predicted that China could overtake Japan as the world's largest LNG importer as soon as 2022.[6]

In recent years, natural gas consumption in China has indeed seen significant growth. In 2018, China consumed 280.3 billion cubic metres ("bcm") of gas, being an 18% increase from 2017. China's gas demand in 2019 was estimated to grow by 10%.[7] On the other hand, its domestic gas production has not managed to keep pace with rapid demand-side growth.[8] In 2018, gas imports accounted for approximately 45% of gas consumption.[9] Although China holds one of the world's largest reserves for shale natural gas and is among the top 10 holders of proven natural gas reserves, there are various constraints relating to costs, infrastructure, and geographic and technological issues which continue to hinder its ability to meet domestic gas demand in a self-sustained manner.[10] At least in the foreseeable future, it is expected that China will continue to rely on imports to meet a significant portion of its natural gas demand needs.

With its existing and proposed cross-border pipeline connections with gas exporting countries (e.g. Turkmenistan, Russia and Myanmar),[11] a key competitor to LNG in China has been, and conceivably will continue to be, gas imports via pipeline. While pipeline gas admittedly offers certain advantages over LNG (not least in terms of cost competitiveness for inland regions of China), LNG offers greater flexibility to access global supply sources and in the current pricing environment remains potentially competitive pricing-wise for coastal demand centres. At least in the short to medium term, it does appear that LNG will continue to play an important role in China's energy mix, notwithstanding the competition posed by pipeline gas (amongst other alternative energy sources).

Apart from the strong policy push to switch to cleaner burning fuels (as discussed below), the demand for LNG has been tied to the consumer and industrial demand in China for energy consumption which, in turn, is driven by economic growth trends. While China's GDP over recent years has continued on an upward trend, due to (amongst other things) the effects of trade tensions between China and US, that growth has slowed to a multi-decade low.[12] In the near term, it remains to be seen whether the economic slow-down will persist and what its effect will be on the overall demand for LNG imports. In the long term though, it is anticipated that China's overall demand for energy (including gas) will nevertheless continue to grow.[13] That, of course, bodes well for the prospect of further growth to come in LNG importation.

Policy background

Being the world's largest consumer and producer of coal,[14] China has been heavily dependent on coal as a fuel source for the past several decades. However, one of the direct results of coal burning for power generation (as well as its mining and production) has been severe air pollution. The resulting adverse health effects have been a significant cause for concern for both the general population and the government.

In March 2014, China's premier, Li Keqiang, on behalf of the entire government, declared at the National People's Congress that "[w]e will resolutely declare war against pollution as we declared war against poverty." This "war" on pollution has been in no small part a significant contributor to the growth of natural gas (including LNG) in China, with the latter being a substantially cleaner fuel source compared to coal. Various government pronouncements, directives and regulations have provided a strong impetus to the natural gas consumption and importation. In 2016, the National Development and Reform Commission ("NDRC") and the National Energy Administration ("NEA") issued the "13th Five-Year Plan for Energy Development" (《能源发展"十三五"规划》) and the "13th Five-Year Plan for Natural Gas Development" (《天然气发展"十三五"规划). They emphasized the importance of the continued construction of natural gas infrastructure and the further development of the natural gas market. The target was set to increase natural gas in primary energy consumption from 5.9% in 2015 to 10% by 2020 and to reduce coal consumption from 64% in 2015 to below 58% by 2020.

China's government policy remains a key driver behind the growth of its gas and LNG industry. As further discussed below, the government's coal-to-gas conversion plan and related policy decisions will have significant implications for the development of new LNG terminals and third party access to terminals (existing and new).

China's LNG terminals and gas infrastructure – ownership and operation

Current state of ownership and operation

As of April 2019, there were 21 LNG terminals in operation across China with an aggregate annual receiving capacity of over 80 million tons, with the majority of receiving terminals being owned and operated by CNOOC. The balance of the LNG terminals are owned and operated by CNPC, Sinopec and other non-national oil company ("NOC") entities respectively.

Only a minority of Chinese terminals have (whether wholly or partially) non-NOC ownership interests.[15] However, there is a growing appetite in various quarters for the development of further new terminals owned in whole or part by non-NOC entities.[16] A number of such terminals have been proposed by non-NOC players and are at varying stages of national approval and permitting.[17]  

With respect to China's pipeline network, CNPC is reported to presently control nearly 80% of major gas pipelines.[18] Similar to the terminal ownership situation, the pipeline network has been dominated by the presence of the NOCs. However, as further discussed below (see section 3.2) the Chinese government has taken initial and important steps to segregate pipeline ownership and spur competition through the proposed establishment of the national pipeline company.

When compared to other major gas consuming countries, it is also noteworthy that there are material gaps in terms of the coverage and capacity of China's natural gas infrastructure. As of 2018, China's underground gas storage facilities amounted to only 11.7 bcm, making up less than 5% of the total gas consumed, and significantly below the 20% figure for other top consuming nations such as the United States and Russia.[19] In order to address these infrastructural issues, the 13th Five-Year Plan for Natural Gas Development targets to substantially expand relevant infrastructure and capacity, for instance, by doubling the domestic pipeline grid by 2020 and expanding the country's storage facilities for natural gas.

Establishment of new national pipeline company

Traditionally the entire value chain of China's oil and gas industry has been dominated by the "three barrels", albeit that there have been (and continue to be) incremental moves to open up the industry to increased competition. The 13th Five-year Plan called for reform in the oil and gas industry for the purpose of improving its operational efficiency and ensuring national energy security. Aiming at liberalization of its market, the Chinese government perceives the independence of the pipeline network as a crucial and transformative step to achieving that goal.[20]

Apart from various regulatory and legislative changes (as further discussed below) to require availability of third party access to terminals and pipeline networks, a key move to enhance competitive efficiencies would be the separation of the ownership and operation of gas facilities from gas marketing and sale activities. As of 9 December 2019, China's new national pipeline company was officially launched, joining the ranks of the existing national oil and gas giants. Long-distance pipelines and certain other terminal and infrastructure assets (including relevant personnel) will be separated from the "three barrels" and injected into the newly established pipeline company, with a view to opening up access to smaller players and increasing market competition. Reportedly, the State-owned Assets Supervision and Administration Commission of the State Council (SASAC), CNPC, Sinopec and CNOOC may take 40%, 30%, 20% and 10% shareholdings respectively in the new company,[21] although this may not yet be confirmed[22].

On the face of it, given that the new pipeline company will be dedicated to holding assets in the midstream sector and not be involved in upstream or downstream activities, its establishment is a significant milestone in China's move towards opening pipeline and terminal assets to third party access. However, the success of the company going forward will depend on various factors, including the precise scope of pipeline assets to be transferred (e.g. the number of terminals transferred), the pricing and other conditions of access offered to the market, and last but not least the manner in which management rights will be allocated and exercised in order to ensure the pipeline company's independence from its major shareholders in terms of the operation and management of its assets. How these factors will develop and manifest in final form, whether through corporate structuring or regulatory oversight, will be watched with keen interest by industry participants and observers. 

Regulatory approvals and permits for development of new terminals

NDRC approval process and timeline

In China, various authorities are responsible for the approval and permitting of the development of new terminals and related issues. The primary (though not sole) authority for approval of new terminals is the NDRC.[23] As a government body in charge of macroeconomic management of the country and reporting directly to the State Council, the NDRC is separated into central and provincial level authorities.

New imported LNG terminal projects (including expansion projects in different sites) are subject to NDRC approval at the central level (and furthermore, projects with capacity of 3 million tons per annum or above must also be filed with the State Council). Other imported LNG terminal projects (such as expansion at an existing site) are subject to government approval at the provincial level.[24]

Previously, the submission of an application for NDRC approval was required to be accompanied by certain "pre-approval documents", which included, pre-approval for land use and sea use, and opinions on project location.[25] As of 2019, NDRC would accept and review applications for new LNG receiving and storage terminal facilities without the pre-approval documents being submitted at the same time.[26] Practically speaking, however, this may not make much difference to the approval timeline. If the NDRC application is not accompanied by the pre-approval documents, then those documents need to be submitted as supplementary materials within 50 business days, with failure to do so rendering the application liable for rejection and exposing the applicant to possible penalties.

The statutory timeline for NDRC approval is set out under the Measures for the Administration of the Confirmation and Recordation of Enterprises' Investment Projects (2017) (《企业投资项目核准和备案管理办法》). This requires amongst other things the approval agency to in principle take 20 business days to make a decision whether to approve the project once application materials have been deemed complete and in the correct format (excluding an interim evaluation period). In practice, however, there is considerable flexibility in terms of timing for NDRC to approve a project. Based on our experience and observation, the approval process can take up to one year or more, depending on the specific circumstances.

For ease of understanding, a simple schematic is set out below addressing the broad timeline for regulatory approval and permitting of new terminal development:

Other approving authorities

Apart from the NDRC approval (and the relevant pre-approvals) noted above, there are several other agencies involved for the purpose of LNG terminal project development approvals, including the Department of Ecology and Environment of the State Council and its respective provincial counterparts (who will approve the environmental impact report prior to LNG terminal construction) as well as the Ministry of Natural Resources, national port, maritime and safety authorities and their respective provincial counterparts.

In the context of LNG terminal construction, it is also important to note the potentially applicable tender requirements. In general, large projects of infrastructure facility or public utility that have a bearing on the social public interest and the safety of the general public, and projects entirely or partially using state funds or loans by the state are subject to a tender process.[27] For projects that are subject to tender requirements and for which state funds take controlling or leading position, an open tender is required, except in certain exempted circumstances[28] (e.g. where only a small number of potential bidders are available for selection due to complicated technologies involved, special requirements or restrictions from the natural environment). In such cases, the developer of the project will be permitted to carry out an invitational tender and without the more onerous requirement to undertake an open tender process.

Third party access

Introduction of the 2014 Trial Measures – First steps to third party access

Consistent with China's overall energy reform plan, the Chinese government in 2014 issued the Measures for the Supervision and Administration of Fair Opening of Oil and Gas Pipelines Network (2014) ("2014 Trial Measures",《油气管网设施公平开放监管办法(试行)》) and started a five-year trial period to provide eligible third parties with access to midstream oil and gas infrastructure, including LNG terminals and storage facilities. Pursuant to the Trial Measures, eligible third parties referred to are the oil and gas pipeline network facilities operators and their upstream and downstream customers. Although the 2014 Measures are now expired and have been replaced by new measures issued in 2019 (as further discussed below), it is still worthwhile examining briefly these measures as they were the first time that third party access regulations were introduced into China and they also formed the foundation of the new 2019 Measures (as defined and further discussed below).

Broadly speaking, the 2014 Trial Measures required (amongst other things):

  • existing oil and gas pipeline network facility operation enterprises (which included LNG terminal operators) ("Pipeline Facility Operators") to provide access to third parties in a non-discriminatory manner subject to their spare capacity, and such access not affecting existing services provided to existing users;
  • the price of such services to reflect pricing determined by the competent pricing authority in accordance with relevant regulations; and
  • Pipeline Facility Operators to disclose certain information to third parties and the NEA (or its local counterparts), including information relating to facilities operation status, spare capacity and location of terminals.

Consistent with and complementary to the 2014 Measures, the Chinese government also issued or implemented various other measures and circulars (which are still current) aimed at promoting third party access to terminals. [29]  

Coming into effect of the 2019 Measures

After the five-year trial period, China announced in 2019 the new Measures for Regulation of Fair and Open Access to Oil and Gas Pipeline Facilities ("2019 Measures") (《油气管网设施公平开放监管办法》). The 2019 Measures are based on the 2014 Trial Measures but with more specificity and details based on the experience accumulated during the past five years. Generally, the requirements under the 2014 Trial Measures remain applicable subject to certain updates. Some of the key features of the 2019 Measures include (amongst other things):

  • a more comprehensive scope of information required for public disclosure;  
  • a pricing regime for third party access to LNG terminals and pipelines to reflect government mandated pricing and market set pricing (however, much about the intended pricing regime remains to be seen – see our further comments on this below);
  • the signed third party terminal use contract to be registered at a government designated website ("信用中国")[30] and more information sharing.

As mentioned, the 2019 Measures point to a pricing regime for third party access. However, the 2019 Measures themselves are in fact silent on the circumstances in which government mandated pricing or a market price will apply, and do not address various details (as further discussed below) relevant to the third party access pricing regime.

Insofar as government mandated pricing applies, the 2019 Measures do not identify the responsible price-setting authority. That said, the pricing catalogues issued by the central and certain provincial governments at least offer some guidance in this regard, providing that pipeline transmission within the province (including the price of regasification service) is to be determined by the provincial pricing bureau whilst inter-provincial pipeline transmission pricing is to be determined by the NDRC's pricing department.  

Furthermore, the 2019 Measures also do not prescribe the exact manner for determining third party access pricing. In the case of pipeline access, other regulations[31] provide greater detail on the tariff determination mechanism. In particular they provide that the price for third party access to pipelines should be based on the principle of "eligible costs plus reasonable return" (with the allowed rate of return differing as between inter- and intra-provincial transmission) and that the transmission price should be adjusted at fixed intervals or when special circumstances arise.[32] For third party access at LNG terminals, whether for regasification and/or storage services, there is considerably more ambiguity (and lack of details) on how the authorities will determine the pricing for such services e.g. how the period for which such price should be fixed, or the adjustment mechanism in such regard.

The 2019 Measures and other related regulations provide a greater level of specificity compared to the 2014 Measures, and they are an important step in the right direction to greater third party access to terminal and pipeline facilities. That said, how effective the implementation of the 2019 Measures will be remains to be seen. This is particularly so given that certain aspects of the regulations continue to reflect considerable ambiguity, for instance, the mechanism for determining spare capacity (which remains undefined) and the pricing regime (which does not address all aspects of third party access tariffs). Importantly, apart from the development of more specific and detailed rules or other means of clarifying current areas of ambiguity such as the determination of when "spare capacity" is available (something which also remains undefined in the measures) and the pricing matters discussed above, the enforcement of the relevant requirements in both letter and spirit will also be a key determinant in the successful promotion of third party terminal and pipeline access.

Foreign investment into Chinese terminals

General issues

At present, there are only 2 operational LNG terminals in China which have foreign ownership interests, namely the Guangdong Dapeng Terminal (with BP as the foreign shareholder) and the Jiangsu Rudong terminal (with Pacific Oil and Gas as the foreign shareholder).  While there are admittedly challenges for foreign companies investing in the Chinese LNG terminals, there is also potential interest in such investment from foreign companies. Exxon Mobil is the latest foreign company to announce a proposed investment (together with the Guangdong Yuedian Group).[33] In a number of instances, these foreign investments may be linked to a potential LNG supply agreement into China.

In China, the foreign investment framework comprises of a reasonably complex and extensive mix of primary and supporting regulations, and a detailed analysis of which is beyond the scope of this article. However, in this section we briefly highlight some key elements of the investment framework and identify some of the important considerations for foreign investors (and their Chinese counterparts).

Conflict of interest

Potential joint ventures involving foreign parties may be tied to related contracts entered into by either the foreign or local participant (or one of their affiliates) e.g. an agreement for the supply of LNG by an affiliate of the foreign participant to the terminal joint venture entity. One of the issues potentially arising from such project structure is the possibility of conflicts of interest during governance related decisions, for instance, where the joint venture entity needs to make a decision in connection with the related party contract, for instance, whether to agree to a variation of such contract. As a matter of general corporate governance, we would expect the joint venture document to typically require the conflicted shareholders to abstain from voting on such matter and leave the decision making process to the non-conflicted shareholders. However, whether this is necessarily the appropriate result in every case will depend on the particular circumstances of the contractual relationship, and likely feature as an important aspect in negotiations between the joint venture parties.

Foreign investment framework

The framework of foreign investment laws in China has experienced significant change in recent years with more to come. In particular, the coming into effect of the new foreign investment law and its implementing rules beginning of this year constitute a significant set of legislation which will directly affect foreign investment in Chinese terminals (amongst other things). Some key features of the foreign investment framework are discussed below.

  • Prior to 1 January 2020, China's foreign investment framework was primarily comprised of three laws (namely Law of the People's Republic of China on Chinese-Foreign Equity Joint Ventures ("Sino-Foreign JV Law", 《中华人民共和国中外合资经营企业法》), Law of the People's Republic of China on Chinese-Foreign Contractual Joint Ventures ("Sino-Foreign Contractual JV Law", 《中华人民共和国中外合作经营企业法》), and Law of the People's Republic of China on Wholly Foreign-Owned Enterprises ("Foreign Enterprise Law", 《中华人民共和国外资企业法》), collectively referred to as the "Traditional Regime". Each of these laws governed the establishment and operation of different types of foreign-related entities. Joint ventures with Chinese partners ("JVs") were governed under the first two laws while wholly foreign owned enterprises ("WOFEs") were set up under the third one. Collectively, WOFEs and JVs were termed as foreign invested enterprises ("FIEs").
  • In March 2019, China's National People's Congress passed the Foreign Investment Law of the People's Republic of China ("Foreign Investment Law", 《中华人民共和国外商投资法》) which came into effect on 1 January 2020 and replaced the Traditional Regime. The corporate organizational forms and corporate governance of JVs are now subject to Company Law of the People's Republic of China ("Company Law", 《中华人民共和国公司法》) and Partnership Enterprise Law of the People's Republic of China ("Partnership Enterprise Law", 《中华人民共和国合伙企业法》) as well as other relevant laws and regulations. Notwithstanding the above, the new law grants a five year grace period to existing FIEs during which they may maintain their current corporate organizational structure.
  • Traditionally, foreign investment was subject to approval by the Ministry of Commerce ("MOFCOM") on a case-by-case basis, although as per the practice of recent years, foreign investors only needed to register with the relevant government agencies for investment that did not fall into the scope of the "negative list" delineated in the Market Access by Foreign Investors Special Administrative Measures (Negative List) ("Negative List", 《外商投资准入特别管理措施(负面清单)》). The Negative List (which was first published in 2017 and then subsequently revised in 2018 and 2019) refers to a list of industries in respect of which foreign investment is prohibited or restricted. The Foreign Investment Law officially deletes such approval requirement for investment outside the Negative List. Instead, it adopts the approach that foreign investment outside of the Negative List will be accorded national treatment at the stage of investment access.
  • The Negative Lists published so far do not impose any restriction on foreign investment in LNG terminals. Technically, therefore, it is permissible as a matter of Chinese law for foreign investors to own 100% of an LNG terminal. On this basis, foreign investors could be treated in the same way as domestic investors with respect to investing in new LNG terminal projects in China and subject to the same regulations. However, this may be affected by a number of factors, including national security considerations (see further below).

We examine below certain specific issues relating to JVs and the contractual documentation that may arise from the replacement of the Traditional Regime by the Foreign Investment Law.

Nature of the JV entity and corporate governance

Under the Traditional Regime, there were two types of joint ventures – the equity JV and contractual JV. Currently, all foreign investment will need to follow the corporate governance requirements under the Company Law, although (as mentioned) existing JVs will have five years to transition into full compliance with the Company Law. A significant change is that although under the Traditional Regime the board of directors was the highest authority, under the new regime the shareholders are the highest decision-making authority. For existing terminal JVs, potential adjustments to their corporate governance would be to include in the SHA provisions relating to shareholder meeting and voting methods and the authority of the board of directors, voting methods and how they are constituted.

Generally, the parties are free to decide on the commercial terms in the JV agreement and establish the bylaws, subject to overriding restrictions under the Company Law. To the extent that stipulations in the bylaws are in violation of the mandatory requirements in the Company Law, such stipulations will be deemed null and void. It is important therefore for the corporate governance documents of JVs not to fall afoul of such mandatory requirements such as shareholder voting in respect of matters including company guarantees for shareholders or actual controllers, business policy and changes to registered capital.

National security review

Based on current regulations,[34] foreign-invested M&A projects in general and foreign-invested M&A projects and foreign direct and indirect investment projects in free trade zones are subject to national security review. Important energy and resources, infrastructure and transportation services are in principle included in the scope of application of the national security review.

Pursuant to the Foreign Investment Law, foreign investment that affects or may affect national security will be subject to national security review and decisions made for national security reasons will be final and cannot be appealed. Due to lack of more details and potentially wide scope of discretion accorded to the authorities in arriving at national security decisions, it is not possible to anticipate with certainty how such review will apply to LNG terminals projects with foreign investment involved.

Governing law, language and dispute resolution

Under the Traditional Regime, the conclusion, validity, interpretation, enforcement and dispute resolution with respect to JV contracts and cooperation contracts were permitted to be governed by PRC law, and disputes arising thereunder could be resolved by arbitration held in or outside China. Furthermore, the Traditional Regime did not specify any requirements regarding the language of the JV contracts.

The question arises as to how these issues will be addressed following the replacement of the Traditional Regime by the Foreign Investment Law. On one hand, the Foreign Investment Law and the Company Law are currently silent on these issues. On the other hand, the Contract Law 《中华人民共和国合同法》, which is the general source of contract law in the PRC, will generally apply by default to JV contracts in the absence of any other laws to the contrary. In particular, the Contract Law stipulates that PRC law should be the governing law for JV contracts which are performed within the territory of China. As regards dispute resolution, the Contract Law allows disputes in connection with foreign-related contracts to be resolved by offshore arbitration.


The evolving nature of the regulatory environment in China will continue to be watched with keen interest by not only the domestic energy industry but also LNG sellers and potential foreign investors. From the perspective of domestic companies, the development of a fully transparent and truly open access regime, whether via regulations and/or ownership separation of the terminal and pipeline assets from the sales and marketing businesses, will be a game changer in optimising terminal and pipeline utilisation and enhancing the competitive landscape. From the perspective of external parties, a thorough understanding of the emerging third party access regulatory landscape will be necessary to evaluate the risk profile for potential sale and investment transactions. For foreign investors, this will need to be coupled with an in-depth appreciation of the applicable foreign investment framework. Being already one of the world's largest LNG importers, China will continue to remain a major player in the international natural gas markets. More broadly, the developments in its domestic regulatory framework on terminal development, gas network infrastructure and foreign investment in related sectors will have a significant impact on the future direction of the LNG industry across the full value chain not only in China but also globally.  

If you would like further advice on matters relating to LNG terminals in China and associated issues, please get in touch with one of our experts from the International Projects, Energy and Resources practice of King & Wood Mallesons.


[1] In this article and unless otherwise indicated by the context, references to "PRC" refer to the People's Republic of China and references to "China" refer to mainland China, which, for avoidance of doubt, excludes the following regions of the PRC: the Special Administrative Regions of Macau and Hong Kong, and Taiwan.

[2] Presently, these terminals are largely owned and operated by the three national oil companies, i.e. China National Petroleum Corporation ("CNPC"), China Petroleum and Chemical Corporation ("Sinopec"), and China National Offshore Oil Corporation ("CNOOC") (collectively referred to as "three barrels" or "NOCs" or individually referred to as a "NOC") coupled with a small (albeit a growing) representation of private players.

[3] A reportedly 31.7% year-on-year increase, see








[11]   China is presently importing gas through the Central Asia-China gas pipelines, the China-Myanmar natural gas pipelines and the recently commissioned Power of Siberia pipeline.




[15] Wuhaogou (Shanghai) LNG terminal owned by Shanghai Natural Gas Pipeline Network Company, a subsidiary of Shenergy Group; Yangshan (Shanghai) LNG terminal owned by Shenergy Group and CNOOC; Jovo (Dong Guan) LNG terminal owned by Jovo Energy Group; Guanghui Qidong (Jiangsu) LNG terminal owned by Guanghui Energy Group; and ENN (Zhoushan) LNG terminal owned by ENN Group.

[16]   For example, Exxon Mobil announced its plan to build a chemical complex and LNG terminal in Guangdong province in 2018. See

[17]    Huaying Natural Gas has recently obtained approval from NDRC and other relevant government agencies to build a LNG receiving terminal in Guangdong with a capacity of 6 million ton/year.





[22]  The National Enterprise Credit Information Publicity System, an enterprise information publicity platform hosted by the State Administration for Market Regulation, shows that as of 21 January, the national pipeline company is 100% owned by the State Council.

[23] The National Energy Administration ("NEA") is established under the NDRC. When we refer to NDRC approval for LNG terminals, the term NDRC includes NEA unless states otherwise.

[24] Administrative Regulations on Approval and Filing of Projects Invested by Enterprises (2016) (《企业投资项目核准和备案管理条例》); Notice of the State Council on Issuing the Catalogue of Investment Projects Subject to Government Confirmation (2016) (《国务院关于发布政府核准的投资项目目录的通知》).

[25] The relevant approving authorities, being namely: The Urban and Rural Planning Administrative Department for opinions on project location; the Administrative Department of Land and Resources for pre-approval for land use; the Sea Area Administrative Department for pre-approval for sea use. There may also be project social security risk assessment report required, and opinions from the Ministry of Transportation for the use of supporting docks and port deep water shoreline. See

[26] Circular regarding the Setup of Green Channel for Oil and Gas Projects by NDRC and NEA (《关于建立油气项目核准工作绿色通道有关事宜的通知》).

[27] The Bidding Law of the People's Republic of China (2017) (《中华人民共和国招标投标法》).

[28] Regulation on the Implementation of the Bidding Law of the People's Republic of China (2019) (《中华人民共和国招标投标法实施条例》).

[29]  See the Measures for the Administration of Natural Gas Infrastructure Construction and Operation (2014) (《天然气基础设施建设与运营管理办法》), the Notification on Report of Information on Supervision of Oil and Gas (2014) (《关于做好油气监管相关信息报送工作的通知》), and the Notification on Publication of Information on Opening of Oil and Gas Pipeline Networks (2016) (《关于做好油气管网设施开放相关信息公开工作的通知》).


[31] See Measures for the Administration of Natural Gas Pipeline Transportation Prices (for Trial Implementation) (《天然气管道运输价格管理办法(试行)》) issued by NDRC in 2016 in relation to inter-provincial gas transmission and similar instruments issued by certain provincial DRCs (development and reform commission) for intra-provincial transmission.

[32]  Namely, an adjustment every three years in principle or adjustment in advance when any major changes occur with respect to the pipeline investment, gas volume transmitted or the costs.



[34] See the Notice of the General Office of the State Council on the Establishment of the Security Review System for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (2011) (《国务院办公厅关于建立外国投资者并购境内企业安全审查制度的通知》); the Anti-Monopoly Law of the People's Republic of China (2007) (《中华人民共和国反垄断法》); and the Notice of the General Office of the State Council on Issuing the Measures for the Pilot Program of National Security Review of Foreign Investment in Pilot Free Trade Zones (2015) (《国务院办公厅关于印发自由贸易试验区外商投资国家安全审查试行办法的通知》).

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