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July 23 (Reuters) - PetroChina, China’s state-owned oil and gas firm, said on Thursday it would sell its major oil and gas pipelines and storage facilities to the newly launched China Oil and Gas Pipeline Network for 268.7 billion yuan ($38.36 billion).
The creation of the new company, also called PipeChina, marks the largest industry reshuffle in the country in the past two decades, aimed at providing fair market access to infrastructure and boost investment in oil and gas production.
Beijing started considering reforming the sector nearly a decade ago but only approved the plans early 2019, spurred by a national campaign to boost consumption of the cleaner burning natural gas and curb dirtier coal.
As part of Thursday’s deal, PetroChina said it will get a stake of about 30%, worth 149.5 billion yuan, in PipeChina and that the new entity would pay the rest in cash.
The sale excludes the assets of Kunlun Energy, in which PetroChina has a 54.4% stake, it said in a statement.
Upon completion of the transactions, PipeChina will become an associate company of PetroChina, a listed arm of CNPC.
PetroChina expects to book a gain of 45.82 billion yuan from the disposal of its assets, which it will use to pay dividend and for capital expenditure, it said in a statement.
Earlier in the day, China Petroleum & Chemical Corp (Sinopec) also announced plans to sell some of its oil and gas pipeline assets for 47.11 billion yuan to PipeChina, of which 22.89 billion yuan will be injected into PipeChina for an equity interest.
$1 = 7.0049 Chinese yuan renminbi Reporting by Arathy S Nair and Sameer Manekar in Bengaluru and Muyu Xu in Beijing and; Editing by Saumyadeb Chakrabarty and Anil D’Silva
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