PetroChina reconsiders sale of natural gas pipeline assets: sources

Fri Jul 25, 2014 1:48am EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Chen Aizhu and Charlie Zhu

BEIJING/HONG KONG (Reuters) - PetroChina is reconsidering a plan to auction off its multi-billion dollar natural gas pipeline unit, and could instead sell it to an affiliate, three people who were briefed on the matter by the Chinese energy giant told Reuters.

Selling PetroChina Eastern Pipelines Co Ltd to the affiliate, 50 percent owned by PetroChina, would enable China's largest energy producer to maintain control over the national gas grid as well as raise cash to fund oil and gas exploration.

But scrapping the auction would pose a setback to the government's plans to open up the state-dominated energy sector to domestic private investors to improve competition and rein in corruption.

PetroChina controls more than 80 percent of China's natural gas grid, and some privately owned domestic gas companies have complained this monopoly hurts their business.

"It's almost a done decision to let the joint venture... acquire Eastern Pipelines," said a Beijing-based energy industry executive, who declined to be named as the matter remained confidential.

"Few private investors also have the financial appetite to swallow such a massive asset," the executive added.

A financial industry executive who was also briefed on the sale added: "It's a possibility that PetroChina actually would like to see. They are moving in that direction."

PetroChina's spokesman, Company Secretary Mao Zefeng, declined to comment. Analysts expect PetroChina to make a final decision on the sale in the fourth quarter.   Continued...

 
PetroChina's logo is seen at a gas station in Beijing in this August 29, 2013 file photo. REUTERS/Kim Kyung Hoon/Files