China Petroleum and Chemical Corp., or Sinopec, said late Tuesday that it would sell a 50% stake in Sinopec Sichuan to East China Gas Pipeline Co., Ltd. This is seen by market sources as a result of the government’s State-owned Enterprise Reform scheme.
The 2,200 km Sichuan-East China pipeline, which started commercial operations in 2010, connects the gas producing areas of Sichuan and Chongqing in southwestern China to consumers in the east.
The company expects to complete the pipeline expansion by the end of this year.
The pipeline currently transports around 8 Bcm/year and after expansion will carry 13-14 Bcm/year. The gas will come from the 8 Bcm/year Pugang field, the 3 Bcm/year Yuanba field and the 5 Bcm/year Fuling field.
The government’s SOE scheme is aimed at allowing more private investment in state-owned companies to make them more efficient and modern.
In September 2014, Sinopec offered a 30% stake in its retail division, Sinopec Marketing Co. to 25 domestic and foreign investors for Yuan 107.1 billion ($16.16 billion).
PetroChina has also consolidated its three pipeline companies into a single entity, PetroChina Pipeline Co., in late December, which is expected to lead to a stake sale later.