China National Petroleum Corporation to accept private equity in natural gas project

China National Petroleum Corporation has begun building China’s third pipeline that will move natural gas from the country's resource-rich western regions to the energy-deficient eastern regions.

CNPC, China’s largest integrated energy company, said the total investment in the project comes to US$20 billion with completion expected in 2015. It holds a controlling stake in the project, which it said remains open to private capital.

China's Social Security Fund, Urban Infrastructure Construction Investment Fund and Baosteel have agreed to jointly invest in the project.

CNPC, however, did not say what portion of the project is funded by private capital. Media reports indicate that the Urban Infrastructure Construction Investment Fund owns 16% of the project.

Analysts said the project set a precedent for introducing private capital into the country's state-dominated energy sector. They noted, however, that the maneuver room for private capital in energy projects is still very limited.