The Chinese government wants to reform its oil and gas pipeline network
The end of the week comes bearing deals from the Asian side of the world. China is taking steps in its plan to reform the national oil and gas pipeline network. The newest oil and gas company, PipeChina, is to buy storage facilities and pipelines valued at $56 billion.
PipeChina was created in 2019 to provide neutral access to the Chinese pipeline infrastructure, part of which it is currently owned by PetroChina, to help non-state-owned and small companies, and attract investment in the energy sector.
Besides the pipelines and storage facilities, the deal will bring PipeChina equity in PetroChina and Sinopec (China Petroleum and Chemical Corp).
The deal between PipeChina and PetroChina consists of over 70% stakes in PetroChina’s Pipelines, stakes between 50% and 70% in oil products and transmissions, and a 60% stake in gas pipelines and networks.
PipeChina will acquire a 100% stake in a natural gas pipeline from Sinopec for $460 million in a separate deal.
PetroChina and Sinopec will get stakes in PipeChina of 29.9%, and 14%, respectively.
The assets alone are valued at more than $40 billion. Morgan Stanley and Goldman Sachs will supervise and manage the deals.
The government’s goal is to have PipeChina operating by the end of September.
The market reacted positively to the news, PetroChina’s stock price gained more than 3%, but Sinopec dropped by 0.70%.
Sources: reuters.com, nsenergybusiness.com
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