On December 22, PetroChina issued an announcement stating that the company's subsidiary Kunlun Energy and State Pipe Network Group entered into an equity transfer agreement. According to this, Kunlun Energy has conditionally agreed to sell and State Pipe Network Group has conditionally agreed to acquire Kunlun Energy holdings. The basic transaction consideration is about 40.886 billion yuan, all of which will be paid in cash by the National Pipe Network Group.
According to the announcement, the above-mentioned target equity is 60% equity of Beijing Pipeline Company and 75% equity of Dalian LNG Company. After the completion of this transaction, Kunlun Energy will no longer hold any equity in the target company.
The business scope of Beijing Pipeline Company includes the organization and management of the planning, design, and construction of natural gas pipelines and supporting projects; coordination and management of oilfield gas supply to Beijing; technical services for natural gas gathering, processing, and utilization. The business scope of Dalian LNG Company includes compressed gas and liquefied gas: natural gas (methane-containing; liquefied) storage operation; provision of terminal facilities for ships; and LNG unloading services in the port area.
According to the asset appraisal report, Beijing Pipeline Company’s value of all shareholders’ equity after appraisal by the income method on the appraisal base date was approximately RMB 55.656 billion, and Dalian LNG’s value of all shareholders’ equity after appraisal under the income method on the appraisal base date was approximately RMB 99.9 100 million yuan.
Regarding the sale of the relevant equity of the target company, PetroChina said that the transaction is mainly based on consideration of Kunlun energy strategy and commercial interests. The first is to highlight the main business, Kunlun Energy will focus more on natural gas terminal business; the second is that Kunlun Energy Group's pipeline assets are expected to have a certain degree of uncertainty in the future; after this transaction, the influence of the above uncertain factors will be eliminated; Kunlun Energy's new benefit growth point.
