PetroChina Co. announced plans to unload $2.4b in Central Asian pipelines by selling a 50 % stake in Trans-Asia Gas Pipeline Co. to China Reform Holdings Corp., another state-owned company, Bloomberg reported.
The move is a part of a broader reform aimed at restructuring the underperforming government-run entities with aims to inject private ownership and market forces into the state-dominated energy sector.
Trans-Asia Gas Pipeline Co. operates a system of almost 2,000km pipelines carrying gas through Turkmenistan, Uzbekistan, and Kazakhstan to China’s western province Xinjiang.
“PetroChina is moving forward with the spinoff of its pipeline assets as the company restructures its asset base in response to a lower oil price environment and attempts to plug the earnings gap left by the cut in gas price,” Neil Beveridge, a Hong Kong-based analyst at Sanford C. Bernstein & Co., wrote in a report.
China is also opening up its crude-import market to private companies as the government looks to ease an economic slowdown.
“By allowing more crude imports, we will see smaller refiners increase operating rates, thus contributing to more fiscal revenue,” said Yuan Jun, the general manager of oil trader China Zhenhua Oil Co.