As with Oil, the Natural Gas sector is dominated by the three large state-owned oil and gas holding companies: CNPC, Sinopec, and CNOOC. CNPC operates primarily through its chief subsidiary PetroChina, and all three companies operate numerous local subsidiaries. CNPC is by a considerable margin the countrys largest natural gas player in terms of production and reserves. CNPC data shows that the company produced 1.3 Tcf of natural gas in 2005, a 28 percent year-over-year increase. Sinopec reports that in 2005 the company produced a total of 222 Bcf of natural gas, a 7 percent increase from the previous year. And finally, CNOOC operating data shows that the company produced 142 Bcf of natural gas in 2005, a 7 percent increase from 2004. One major hurdle for natural gas projects in China is the lack of a unified regulatory system. Currently, natural gas prices are governed by a patchwork of local regulations. The Chinese government is in the process of drafting a new legal framework for the natural gas sector, but the process has been slow, and there are still considerable uncertainties regarding price regulation and taxation issues dealing with natural gas sales.