On December 22, PetroChina announced that its subsidiary company Kunlun Energy and the National Pipeline Network Group have entered into an equity transfer agreement. According to this, Kunlun Energy has conditionally agreed to sell and the National Pipeline Network Group has conditionally agreed to acquire Kunlun. The basic transaction consideration for the target equity held by Energy is approximately 40.886 billion yuan, all of which will be paid in cash by the National Pipeline 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 organizing and managing the implementation of the planning, design, and construction of natural gas pipelines to Beijing and supporting projects; coordinating, arranging, and managing the gas supply from oil fields to Beijing; natural gas concentration Technical services for transmission, processing and utilization, etc. The business scope of Dalian LNG Company includes compressed gas and liquefied gas: natural gas (containing methane; liquefied) storage and operation; providing terminal facilities for ships; and engaging in LNG loading and unloading services in the port area.
According to the asset appraisal report, the value of all shareholders’ equity of Beijing Pipeline Company after appraisal based on the income method on the appraisal base date was approximately RMB 55.656 billion. On the appraisal base date, the value of all shareholders’ equity was approximately RMB 55.656 billion. The value of all shareholders’ equity after evaluation using the income method is approximately RMB 9.99 billion.
Regarding the sale of relevant target company equity, PetroChina stated that this transaction was mainly based on the consideration of Kunlun Energy’s strategic and commercial interests. First, by highlighting its main business, Kunlun Energy will focus more on the natural gas terminal business; second, there is a certain degree of uncertainty in the future profit expectations of Kunlun Energy Group’s related pipeline assets; after this transaction, the impact of the above uncertain factors will be eliminated; cultivate Kunlun Energy’s new profit growth point. </p
