PetroChina Co., the largest operator of pipelines in the country, will dispose pipelines valued at $6.3 billion as the government proceeds to liberalize markets for private investment.
A statement released by the Hong Kong stock exchange on Monday said the firm will move the assets into a separate arm. The assets include the First and Second West-East Gas Pipelines, which supply natural gas from central Asian sources and the energy-endowed region of Xinjiang to destinations in eastern China, as Bloomberg reports. The newly separated unit will then be offered for sale via a public tender on a stock exchange.
“The equity transfer will help the company optimize the resource allocation and financing structure and diversify the ownership structure of the company,” the statement said about PetroChina.
President Xi Jinping is going ahead with the most aggressive campaign in more than 10 years to increase market participation. The sale marks the first move after PetroChina chairman said Zhou Jiping said in March the company was allowing private investments in areas such as exploration of oil and gas, refining and pipelines.
The company has vowed to sell more non-key businesses to pump in more capital in upstream ventures locally and overseas and enhance shareholder compensation, according to Economictimes.
Critics say that PetroChina has put too much money on downstream projects, which include petrochemicals and refining, while ignoring more profitable operations such as exploration and production of oil and gas.
Aluminum Corp. of China Ltd, which is owned by the government, is also in talks with the private sector for joint ventures. Sinopec Corp plans to divest about 30% of its retail arm to generate up to $20 billion.
PetroChina added 0.6% in Hong Kong on Monday before the announcement. The stock has soared 5.8% in 2014, compared with a 4.5% flop in the city’s blue-chip Hang Seng Index.
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