CNPC Restructures Gas Business
Year:2009 ISSUE:14
COLUMN:M & A, BUSINESS & TRADE
Click:212    DateTime:May.13,2009
CNPC Restructures Gas Business     

China Petroleum Pipeline Bureau (CPPB) and China Huayou Group Corporation (Huayou), subsidiaries of China National Petroleum Corporation (CNPC), have put on sale stakes in nine gas companies on China Beijing Equity Exchange for RMB1.086 billion.
   The stakes to be sold include the CPPB's 100% stake in CNPC Natural Gas Pipeline Gas Investment Co., Ltd., and Huayou's 63.11% full interest in Yongqing Huayou Gas Co., Ltd., 51% in Bazhou Huayou Gas Co., Ltd., 51% in Zoucheng Huayou Gas Co., Ltd., 89.99% in Zhuozhou Huayou Gas Co., Ltd., 35% in Changsha Xinneng Car-use Gas Co., Ltd, 43.55% in Hunan Huayou Natural Gas Distribution Co., Ltd., 51% in Hainan Huayou Fuel Gas Co., Ltd, and 51% in Changde Huayou Gas Co., Ltd.
   The nine companies all engages in urban gas businesses. Six of them made money in 2008, with combined net profit of over RMB65 million. The three unprofitable companies had combined loss of over RMB86 million.
   The sale shows an additional major step by CNPC to integrate its fuel gas assets, industry insiders said.
   CNPC, which first mooted the integration gas plan in 2007, established the PetroChina Kunlun Gas Co., Ltd. in August 2008, aiming to concentrate the spreading fuel gas businesses for convenient management, more efficient operations and make its gas business more competitive.
   The sale is likely to be an internal deal within the CNPC as gas is a key development business for the group, analysts said. The two subsidiaries said a buyer must be fully state owned or state controlled company with a registered capital of no less than RMB3 billion and the capability to acquire stakes in at least five selling targets at the same time. That means PetroChina Kunlun Gas Co., Ltd. would be a possible buyer.