PipeChina Makes $6.3bn Asset Purchase
China's newly established oil and gas infrastructure operator PipeChina has reached an agreement to acquire yuan 40.9bn ($6.3bn) in assets from Hong Kong-listed Kunlun Energy, the latter reported on December 22.
The deal is the latest of several major acquisitions by PipeChina, which was set up in December 2019 after years of negotiations to break the monopoly of China's largest state oil companies over oil and gas transportation, ensuring third-party access to their capacity. The company officially started operations in October.
PipeChina will acquire a 60% interest in the 60bn m3/year Shaanxi-Beijing gas pipeline network and a 75% stake in Dalian LNG, a 6mn metric ton/year import terminal in northern China. Kunlun is a subsidiary of state oil giant PetroChina and also owns LNG terminals in Jiangsu and Tangshan. The remaining 40% interest in the Shaanxi-Beijing pipeline is owned by Beijing Gas, while 25% of Dalian LNG is held by Dalian Port and Dalian Construction Investment.
PipeChina will pay for the assets in two installations after the deal is closed. The company already owns eight LNG terminals and agreed in July to pay PetroChina and China Petroleum & Chemical Corp some $56bn in cash and shares in exchange for oil and gas pipelines and storage facilities.