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PetroChina sets up new pipeline unit
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PETROCHINA has set up a new pipeline unit by bundling three subsidiaries and restructuring assets with domestic partners via equity transfers, a move that paves the way for future expansion and possible divestments.
With seven-year-low oil prices hitting its revenues and a hefty debt load, PetroChina, Asia’s largest oil and gas firm, is under pressure to slash capital spending and shed more non-core assets.
PetroChina would hold 72.26 percent in the new pipeline unit, called PetroChina Pipelines, and other partners — including institutional investors and non-state firms — would transfer their previous holdings and eventually hold the remaining 27.74 percent, PetroChina said in a statement yesterday.
After the transactions, the new pipeline unit will have registered capital of 80 billion yuan (US$12.4 billion) from an original 50 million yuan.
In the statement, PetroChina said the new pipeline platform bundles together assets from three subsidiaries — Eastern Pipeline Co, Northwest United Pipeline Co and PetroChina United Pipelines Co.
“This ... establishes a unified platform for managing the pipeline assets and financing, setting a solid foundation for future pipeline construction,” the company said in the statement.
Among the key investors are Guolian Fund, China’s National Social Security Fund, several insurance companies and private firms such as Youngor Group.
PetroChina produces two thirds of China’s natural gas and controls nearly 80 percent of the country’s patchy 90,000-kilometer gas pipelines, a bottlenecked grid that has prevented greater use of a fuel with half the greenhouse gas emissions of China’s biggest energy source, coal.
China is expected to unveil a sweeping reform package within weeks that targets its vast energy sector, part of a broader restructuring drive to boost efficiency and bring in private investment.
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