PipeChina has agreed to buy pipelines and storage facilities valued at 391.4 billion yuan ($56bn). Under the deal, PipeChina, (formally known as China Oil and Gas Pipeline Network), will take over oil and gas pipelines and storage facilities from state-owned energy giants PetroChina and Sinopec, in return for cash and equity in the pipeline company.
PipeChina was formed to provide neutral access to the country’s pipeline infrastructure, much of which is owned by PetroChina, in a bid to help small and non state-owned companies and encourage investment in the sector. The Government aims to have PipeChina operating by end-September.
The new company will take on the pipelines, storage facilities and natural gas receiving terminals operated by behemoths China National Petroleum Corp (CNPC), China Petroleum and Chemical Corp (Sinopec Group) and China National Offshore Oil Company (CNOOC).
PetroChina, which is a listed arm of CNPC, said it will sell pipeline and storage facilities, a liquefied natural gas (LNG) terminal in Shenzhen and ancillary facilities for 268.7 billion yuan. The deal includes around $120 billion yuan in cash.
The sale excludes the assets of Kunlun Energy, in which PetroChina has a 54.4% stake, it said. Kunlun owns gas pipelines linking the northwestern province of Shaanxi and China’s capital Beijing.
Sinopec also said it had agreed to sell some of its pipelines assets and the Beihai LNG terminal to PipeChina for 122.6 billion yuan.
After the deals, expected to be completed before 30 September, PetroChina and Sinopec will hold 29.9% and 14%, respectively, of PipeChina.
CNOOC Gas and Power, a subsidiary of China’s top offshore oil and gas producer CNOOC Group, will own 2.9% of PipeChina.
For more information visit www.petrochina.com.cn