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China: New Law on Oil and Natural Gas Pipelines

(July 6, 2010) On June 25, 2010, China's National People's Congress Standing Committee (NPCSC) adopted the Law of the People's Republic of China on the Protection of Oil and Natural Gas Pipelines, in six chapters and 61 articles. The chapters cover, among other topics, planning and construction, protection of pipeline operations, handling of pipeline construction projects interconnected with other construction projects, and legal liability. The Law will enter into force on October 1, 2010. (The Law of the People's Republic of China on the Protection of Oil and Natural Gas Pipelines [in Chinese], The National People's Congress of the People's Republic of China website (June 25, 2010),

One key feature of the new Law is that it authorizes the State Council (Cabinet) to issue specific regulations on protecting China's offshore pipelines (art. 60). Some NPCSC members had suggested that the Law itself include detailed provisions on offshore pipelines, but in the end it was decided that the Law's focus on land pipelines should be preserved. Reportedly, the State Council Legislative Affairs Office, the National Energy Bureau, and the State Oceanic Administration are already in the process of drafting the new regulations. (Latest Draft Law to Boost Offshore Drilling Safety, CHINA DAILY (June 23, 2010),

The Law applies to the protection of pipelines that transport oil and natural gas within the territory of the People's Republic of China. It does not apply to protection of natural gas pipelines in cities and towns or pipelines within oil refinery and chemical and other industrial work zones (art. 2). The Law states that “oil” includes crude oil and refined oil; “natural gas” includes natural gas, coalbed methane, and manufactured coal gas; and “pipelines” include pipelines and auxiliary equipment (art. 3). Some other highlights of the Law are:

  • The State Council departments in charge of energy are to draw up a National Pipeline Development Plan, with input from other relevant State Council departments and the provincial-level governments concerned. The Plan must comply with national energy plans and also be coordinated with general land-use plans, urban/rural plans, and plans for mineral resources, environmental protection, water conservancy, railways, highways, waterways, ports, telecommunications, and the like (art. 11).
  • The Law forbids the following acts that harm pipeline safety: (1) opening or closing a pipeline valve without authorization; (2) damaging a pipeline by using such means as moving, cutting, drilling, smashing, or dismantling it; (3) moving, damaging, or altering a pipeline sign; (4) driving a heavy vehicle on a makeshift road for an inspection tour above a buried pipeline; and (5) walking on or placing any heavy object on a surface pipeline, overhead pipeline, or pipeline bridge (art. 28). Several other provisions forbid certain actions that may damage pipelines in areas at specified distances from either side of the center line of a pipeline, ranging from 5 meters to 1,000 meters. Pipeline enterprises must draw up accompany pipeline accident emergency plan and provide local government authorities in charge of pipeline protection work with a copy for the record. There should also be periodic drills conducted to test personnel and equipment (art. 39, para. 1).
  • If oil from a pipeline leak and oil discharged due to emergency repairs of a pipeline cause environmental pollution, the pipeline company is to promptly control it. Where a third party's action results in a pipeline leak causing environmental pollution, the pipeline company has the right to seek compensation from the third party for the costs of controlling it (art. 40, para. 1). Oil from a pipeline leak and oil discharged due to emergency repairs of a pipeline are to be reclaimed and treated by the pipeline company; no unit or individual may usurp, steal, or loot it (art. 41).
  • In cases where a pipeline construction project overlaps with another construction project, the Law stipulates that unless otherwise provided for by law, the project that commences later will be subordinate to the one commenced earlier or completed; if the two construction projects commenced at the same time, the construction project approved later will be subordinate to the one approved earlier (art. 44, para. 1).
  • Insofar as legal liability is concerned, for certain minor infractions the Law provides various types of administrative sanctions to be imposed by pipeline protection authorities above the county level of government (e.g., art. 50, para. 1). For pipeline company acts that damage other persons' lawful rights or interests, the perpetrators will incur tortious liability in accordance with law (art. 50, para. 3); on the other hand, those who commit acts that endanger pipeline security and cause damage to pipeline companies will also incur tortious liability (art. 55). If an act contravenes public order but does not constitute a crime (e.g., damaging a pipeline by cutting or dismantling it, or stealing or looting leaked oil or natural gas), a public security administration punishment will be meted out; if a crime has been committed, criminal liability will be investigated and affixed (arts. 51 & 57).
  • The Law also prescribes disciplinary sanctions for government officials who fail to take timely action to eliminate external potential safety threats to pipelines and who discover acts that jeopardize pipeline safety or receive reports of such acts and fail to investigate and handle them according to law (art. 56).

(Law, supra;NPC Standing Committee Has Adopted the “Law on Protection of Oil and Natural Gas Pipelines,” 21 ISINOLAW WEEKLY (June 21-June 27, 2010), email from [email protected], received July 2, 2010.)

A number of reasons have been adduced for the enactment of the Law to protect pipelines. They include: increasing tension between pipeline construction and the building of new cities and towns, as pipelines formerly far removed from residential areas gradually began to be surrounded by various types of new construction; increased external acts of destruction of pipelines for such purposes as stealing oil; the multiplying intersections of pipeline construction with other types of engineering projects, such as railroad and highway construction; and the increased construction of international pipelines as well as the fact that many other countries, such as the United States, Canada, and Russia, have adopted specific legislation to protect pipelines. (Problems in Aspects of Protection of Pipelines Became Magnified and China Had to Legislate Protection [in Chinese], CHINANEWS.COM (June 25, 2010),