Today 11:20 PM ET (Dow Jones)
By Wayne Ma BEIJING--China's largest energy producer said Monday that it will separate part of its pipeline business in a bid to bring in private investors to improve returns and efficiency.
The move follows directives laid out in China's landmark reform blueprint issued in November, which called for private companies to play a larger role in a mixed-ownership economy.
State-controlled PetroChina Co. said in a statement that it will establish a wholly owned subsidiary, PetroChina Eastern Pipelines Co., that will contain assets from the first and second phase of its West-East pipeline. Based on two separate audits, the new subsidiary will have net assets of either 29 billion yuan ($4.65 billion) or 39 billion yuan, it said.
The new pipeline subsidiary "will help the company develop the mixed-ownership model, optimize resource allocation and financing structure and diversify the ownership structure of the company," it said.
PetroChina has built its West-East pipeline in three phases. The first phase began operating in 2005, is about 4,000 kilometers long and transports natural gas from the northwest Xinjiang autonomous region to Shanghai. The second phase began operating in 2008, is about 4,800 kilometers long and transports natural gas from Xinjiang to southern Guangdong province. The third phase will be completed in 2015, will span 7,400 kilometers and will transport natural gas from Central Asia to Guangdong.
Write to Wayne Ma at wayne.ma@wsj.com
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(END) Dow Jones Newswires
May 12, 2014 23:20 ET (03:20 GMT)
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