PetroChina to divest of Central Asian pipelines

PetroChina Co. has announced plans to unload US$2.4 billion in Central Asian pipelines.

The country’s biggest energy producer will sell a 50% stake in Trans-Asia Gas Pipeline Co. to a unit of China Reform Holdings Corp., another state-owned company that acts as an investment firm charged with revamping government-run entities.

Trans-Asia Gas Pipeline operates a 1830 km (1140 mile) system that carries gas through Turkmenistan, Uzbekistan and Kazakhstan to China’s far western province Xinjiang.

The restructuring is one path on the road map for reviving underperforming state enterprises.

The collapse in energy prices over the last year has added urgency to the reform plans.

PetroChina, China’s largest oil company, said it would sell its stake in three large pipelines carrying gas from Central Asia, its city gas distribution business, and six underground storage facilities in an asset restructuring worth at least US$3 billion.

Edited from various sources by Elizabeth Corner

Sources: Bloomberg, Financial Times

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