OREANDA-NEWS. August 02, 2013. PetroChina Co. (857), the country’s biggest oil and natural gas producer, will seek to pass on to customers the costs from its midstream businesses at Kunlun Energy Co. (135) and liquefied natural gas transportation, according to Sanford C. Bernstein & Co.

Kunlun Energy will have to pay USD 10.10 per million British thermal units for the gas it liquefies in 2015, up from USD 6.30 now, Neil Beveridge, an analyst at Bernstein in Hong Kong, said in an e-mailed report. Profit will remain at USD 10.30 per million Btu if it raises the LNG retail price for gas-vehicle owners to USD 24.40 in 2015 from the USD 20.60 now, he said.

Kunlun Energy pays a liquefaction cost of USD 4, which will remain constant two years from now, Beveridge said.

“PetroChina estimates that gas-price reform will result in 0.7 yuan per-cubic-meter improvement on gas prices, or 70 billion yuan (USD 11.4 billion) in operating income over the next three years,” Beveridge said. The increase in gas prices is forecast to raise the company’s production from 75 billion cubic meters to 100 billion cubic meters by 2015, he said.

Mao Zefeng, A PetroChina spokesman, didn’t immediately respond to a call to his office in Hong Kong or an e-mail sent seeking comment on Beveridge’s report.

China raised non-residential natural gas prices on July 10 to 1.95 yuan per cubic meter from 1.69 yuan, the National Development and Reform Commission said in a June 28 statement on its website.