BP Pulls Out of China Gas Pipeline
BP Plc has pulled out of bidding to help build a $14 billion natural gas pipeline. "BP has decided not to submit an investment proposal for the West to East pipeline project," said David Nicholas, a BP spokesman in London. "We looked at the opportunity fully and concluded that we would not be able to structure our bid in such a way as to make a unique contribution and add significant value."
The 4,000 kilometer West-East pipeline across China is part of the government's $48 billion program to develop its 11 western provinces that include a quarter of the country's population, but generate only about one-seventh of its wealth. Investors are concerned that the project may not be able to generate a profit due to the pipeline’s political importance.
The pipeline would ship gas from fields in northwestern Xinjiang province to the eastern coastal provinces and cities such as Shanghai. BP's exit leaves groups led by Exxon Mobil Corp. and Royal Dutch/Shell Group as the remaining contenders for the contract, which is expected to be awarded after in late September.