Oil and gas companies flock to Zhoushan

Nearly 4,800 oil and gas companies have opened businesses in Zhoushan since the establishment of the Zhejiang free trade zone in March 2017. This makes the offshore city the biggest oil and gas industry hub in China, according to figures released at the third International Petroleum and Natural Gas Enterprises Conference on Friday.

As the only free trade zone in China centered on the construction of the whole oil and gas industry chain, the China (Zhejiang) Pilot Free Trade Zone reported 192.3 billion yuan (US$27.13 billion) of oil and gas trade in the first eight months of the year, up 33.5 percent from a year ago.

The Zhoushan-based zone also supplied 2.48 million tons of marine fuel, up 10.6 percent year on year.

“It can be said that the development of the whole oil and gas industry chain in Zhejiang Province has stood at a new starting point,” said Feng Fei, executive vice governor of Zhejiang.

Feng delivered a keynote speech at the conference vowing to build a cooperative development platform for the oil and gas industry by taking the advantage of the Belt and Road Initiative to provide new opportunities for global trade and interconnection.

“We welcome and expect global oil and gas investors, traders and dealers to invest and cooperate to build an energy allocation base with international influence,” Feng said.

The Zhejiang free trade zone has unveiled its ambition to achieve three 100-million-ton targets — in reserve capacity, refining capacity and trading capacity — by strengthening measures such as building an international oil and gas trading center, an international oil and gas storage and transport base and an international petrochemical base.

Zhejiang will also pilot “qualified limited partnerships” to support institutional investors to chip in domestic private equity and venture capital markets and expand investment channels for offshore “petro-yuan” to return to China.

It will also deepen cooperation with advanced trading venues at home and abroad, such as the Shanghai Futures Exchange, explore combining futures and spot markets, accelerate the construction of over-the-counter trading, and build a spot market for bulk commodities dominated by oil and gas.

At the same time, Feng vowed to establish a natural gas trading platform and build the oil and gas price index of Zhejiang free trade zone via the Zhejiang Mercantile Exchange.

A total of 21 agreements were reached on Friday, involving firms such as BP, ExxonMobil, Honeywell, Glencore, Trafigura, Total, Mitsui, Sinopec, PetroChina, COSCO Shipping and China Merchants Group.

“We hope to seek more partners through the conference and believe that China is a partner like this," Sharon Weintraub, chief executive officer of BP Integrated Supply and Trading in the Eastern Hemisphere region.

Weintraub said China is currently undergoing energy transformation and upgrading, and constantly promoting clean energy. “We hope that enterprises can work with China to jointly address global climate change and other challenges,” she said.