Gas Processing & LNG is Produced by Gulf Publishing Holdings LLC



PipeChina to take on $56 B of pipelines to boost network access

China is creating an energy infrastructure giant. It took a major step in the reform of its national oil and gas pipeline network with newly formed PipeChina agreeing to buy pipelines and storage facilities valued at 391.4 billion yuan ($55.9 billion).

Under the deal, PipeChina, known formally as China Oil and Gas Pipeline Network, will take over oil and gas pipelines and storage facilities from state-owned energy giants PetroChina and Sinopec, in return for cash and equity in the pipeline company.

The creation of PipeChina is aimed at providing neutral access to the country's pipeline infrastructure, much of which is owned by PetroChina, in a bid to help small and non state-owned companies and encourage investment in the sector.

Investment banks Morgan Stanley and Goldman Sachs had been tapped to act as advisers in the transfer of pipeline assets, which analysts had previously valued at more than $40 billion. The government aims to have PipeChina operating by end-September.

The new company will take on the pipelines, storage facilities and natural gas receiving terminals operated by behemoths China National Petroleum Corp (CNPC), China Petroleum and Chemical Corp (Sinopec Group) and China National Offshore Oil Company (CNOOC).

PetroChina , a listed arm of CNPC, said on Thursday it will spin off pipeline and storage facilities, an LNG  terminal in Shenzhen and ancillary facilities for 268.7 billion yuan, above book value of 223 billion yuan. The deal includes around $120 billion yuan in cash.

The sale excludes the assets of Kunlun Energy, in which PetroChina has a 54.4% stake, it said. Kunlun owns gas pipelines linking the northwestern province of Shaanxi and China's capital Beijing.

PetroChina said it expected to book a gain of 45.82 billion yuan on the asset disposal, which it will use to pay dividend and for capital expenditure.

"The valuation of the pipelines are in line with our expectation but it may disappoint some investors as expectations might have increased after (Sinopec) Kanton's announced spin-off of Yuji pipeline," Citi analyst Toby Shek said in a note.

PipeChina on Tuesday said it will buy Sinopec Kanton's Yulin Pipeline Co for 3.22 billion yuan.

Sinopec also said on Thursday it had agreed to sell some of its pipelines assets and the Beihai LNG terminal to PipeChina for 122.6 billion yuan. That compares to a book value of 86.4 billion yuan.

After the deals, expected to be completed before Sept. 30. PetroChina and Sinopec will hold 29.9% and 14%, respectively, of PipeChina, whose market cap is 500 billion yuan.

CNOOC Gas and Power, a subsidiary of China's top offshore oil and gas producer CNOOC Group, will own 2.9% of PipeChina.

PetroChina shares rose nearly 3.2% to HK$2.89 by 0329 GMT, while Sinopec fell 0.6% to HK$3.43. ($1 = 7.0073 Chinese yuan renminbi) (Reporting by Arathy S Nair and Sameer Manekar in Bengaluru, and Muyu Xu in Beijing; Editing by Florence Tan and Richard Pullin)


Copyright © 2019. All market data is provided by Barchart Solutions. Futures: at least a 10 minute delay. Information is provided 'as is' and solely for informational purposes, not for trading purposes or advice. To see all exchange delays and terms of use, please see disclaimer.

                                  CMEGroup                                     Icelogo

FEATURED COLUMNS

Editorial Comment: China eyes continued expansion of smaller-scale LNG
-Adrienne Blume
Smaller-scale liquefaction in China, the world’s second-largest LNG importer, has experienced growth in recent years as China’s government integrates more gas into the country’s energy matrix.
Executive Q&A Viewpoint: SeaOne expands South American energy options with Compressed Gas Liquid technology
-Bruce Hall
SeaOne is a midstream infrastructure and logistics company that leverages its patented Compressed Gas Liquid (CGL™) technology to lower energy costs in various markets, generating new opportunities for economic growth and environmental stewardship.


Corrosion Control for Gas Treating Amines: Technology Leads to Increased Amine Unit Efficiency

Register Now

Accelerated basin drilling activities combined with increased fugitive gas emission capture technologies have increased trace oxygen levels in midstream natural gas. Oxygen present in concentrations even as low 30-50 ppm will cause costly corrosion-related problems in plant operations and processing equipment. One area in the plant most affected by oxygen is the amine unit. Oxygen will degrade MDEA-blended amines to corrosive amino acids and heat-stable amine salts.

Learn how a new technology from BASF combined with innovation from Nalco Water can increase amine efficiency and reduce costs associated with corrosion. This new technology will inhibit the degradation of amines from oxygen attack and control corrosion in process gas, while stabilizing the amine from degradation into bicine and other heat-stable amine salts. Together with Nalco Water’s real-time amine corrosion control program, have been proven to both mitigate oxygen degradation of amine and reduce the overall corrosivity of amine units.

August 19, 2020 10:00 AM CDT

Register Now

 

Please read our Term and Conditions, Cookies Policy, and Privacy Policy before using the site. All material subject to strictly enforced copyright laws.
© 2020 Gulf Publishing Holdings LLC.