In an interview with the Hong Kong-based South China Post newspaper PetroChina Chairman Chen Geng said, “Sinopec abandoned the project after PetroChina’s recent failure to reach an investment agreement with several foreign partners.”

“I recently met Sinopec chairman Chen Tonghai and he said they would not participate but we have agreed that should they find gas in Tarim Basin we will guarantee to transport the gas for them.

“[I reject] speculation that the investors retreated from the project because of its low return. This is absolutely not the case. The return may be lower at the beginning due to depreciation charges, but it is expected to break even three years after start-up and it will generate profits for several decades thereafter,” he added.

PetroChina’s Chen was referring to the pullout of the three foreign firms which were supposed to have taken a 15% stake in the consortium which would build the pipeline network. Negotiations had broken down because none of the parties could reach a consensus on a joint venture framework agreement with PetroChina.

Sinopec was due to have held a 5% stake in the project.