Chinese state-controlled oil company PetroChina has announced plans to sell a 50% stake in its Trans-Asia Gas Pipeline subsidiary to China Reform Holding unit for CNY15.5bn ($2.4bn).
The company’s latest decision comes as oil companies in China aim to increase their balance sheets amid slump in oil and gas prices.
Due to declining oil prices worldwide, PetroChina witnessed a fall in its net profit by 68.1% to CNY30.60bn ($5bn) from a year earlier.
Further, the company plans to complete asset sales before the end of 2015 in a bid to help meet the profit target set by the government.
The Wall Street Journal reported that the stake, which is being sold by PetroChina will include a portion of a network of pipelines that connect far west Xinjiang region in China to Central Asia’s natural-gas supplies.
Trans-Asia Gas Pipeline operates a 1,830km pipeline which passes through Turkmenistan, Uzbekistan and Kazakhstan to supply gas to Xinjiang province of China.
Details with regard to the completion of the transaction have not been disclosed.
PetroChina also proposes to transfer CNY3.51bn ($548m) worth of natural gas reserves to its controlling shareholder CNPC and hopes to obtain the sales proceeds within 20 days after closing the deal on 30 November.
Separately, the company has signed a letter of intent on integration with Kunlun Energy.
Kunlun Energy, of which PetroChina holds a 58.33% interest, may acquire the equity interests or assets of PetroChina Kunlun Gas, which is wholly-owned by PetroChina.
The parties said that that the integration is possible by way of acquisition of the equity interests or assets of PetroChina Kunlun Gas by Kunlun Energy or other forms of integration.