China finalizes oil, gas infrastructure rules to boost supply security, market reform

China's policy maker, the National Development and Reform Commission, published the finalized "Measures for the Planning, Construction, and Operation Management of Oil and Gas Infrastructure" on its official website on Nov. 13, marking a milestone in the country's ongoing efforts to modernize its energy sector and strengthen supply security.

The new measures, which follow a public consultation period earlier this year, represent the first major regulatory overhaul of oil and gas infrastructure regulations in over a decade. The measures will take effect January 1, 2026, with the previous 2014 regulations repealed simultaneously.

Key changes, first outlined in a draft released in March, include revised gas storage obligations, expanded emergency reserve requirements, and new incentives for private investment and provincial pipeline integration, as earlier reported by Platts, part of S&P Global Energy.

Under the measures, China's national oil companies -- PetroChina, Sinopec and CNOOC -- are required to maintain gas storage equivalent to 5% of their annual supply volume, down from the previous 10% of contracted sales.

State-owned pipeline operator PipeChina must also maintain storage capacity equivalent to 5% of the country's combined annual gas supply from major gas suppliers, while local governments are mandated to maintain emergency reserves covering five days of average daily gas consumption.

The NDRC said the revision is designed to adapt to China's evolving market structure following the establishment of PipeChina and to address long-standing challenges such as insufficient storage capacity, weak emergency response, and limited network connectivity.

The measures encourage provincial pipeline networks to integrate with the national pipeline grid through market-oriented mechanisms. This integration is viewed as crucial for achieving China's objective of a unified "one national network" and for facilitating the completion of delayed interconnection projects.

Private capital is explicitly encouraged to invest in LNG receiving terminals, storage facilities, and non-core pipelines, signaling government efforts to diversify funding sources and accelerate infrastructure development.

This is particularly crucial given China's substantial storage capacity gap -- with only 26.7 Bcm constructed against a 2025 target of 55-60 Bcm, covering just 6.3% of annual consumption compared to 15%-20% in Europe and the US, according to industry analysts.

The new measures are expected to accelerate infrastructure expansion and improve supply resilience, especially during peak demand periods or potential geopolitical disruptions, they noted.

By clarifying storage obligations and incentivizing broader participation, the NDRC aims to balance cost pressures along the supply chain while ensuring systemic resilience.

The shift in obligations -- lowering supplier quotas while adding requirements for pipeline operators -- could ease financial burdens on upstream firms while reinforcing China's gas system against volatility, a market observer said earlier.