LESSONS FROM CHINA'S WEST-EAST PIPELINE
China's West-East Gas Pipeline (WEP) has begun commercial deliveries to target provinces in East China. The WEP project is a symbolic success for the Chinese firms that built it largely unassisted, for the policy-makers that supported it, and for the birth of an integrated gas market of real scale. But as a symbol of commercial investment, the WEP shows that profit motives, the primary driver of foreign investors, can remain subject to political and state-building goals. This CERA Insight reviews the changes ushered in by the WEP's completion and the lessons it reveals about investing in China's gas market:
- Many investors, Chinese and foreign alike, were surprised by the complexity of challenges in building the market.
- Aligning the ""project vision"" of various stakeholders can be especially grueling in today's Chinese gas industry.
- Domestic gas development is accelerating, but with China's new commercial and regulatory complexity, the pace of individual project development may slow.
