China combines three oil pipeline networks into a single operator in much-anticipated merger to improve efficiency in state sector
- The National Oil and Gas Pipeline Network Group would operate the pipelines owned by CNOOC limited, China National Petroleum Corp and Sinopec Group
- The merged company would own 500 billion yuan in combined assets, and be responsible for managing a pipeline network that’s expected to expand by 80 per cent to 240,000 kilometres by 2025
China has combined the oil pipelines operated by the nation’s three state-owned energy companies into a single network, in a long-anticipated consolidation to improve efficiency and ensure adequate supply.
The National Oil and Gas Pipeline Network Group was formally established on Monday in the Chinese capital, according to a notice by state news agency Xinhua.
The new group would own 500 billion yuan (US$71 billion) in combined assets, and be responsible for managing a pipeline network that’s expected to expand by 80 per cent to 240,000 kilometres by 2025. The company cobbled from China National Petroleum Corporation (CNPC), Sinopec Group and China National Offshore Oil Corporation (CNOOC) would help China expand its energy infrastructure and marked a key move in deepening oil and gas reforms, Xinhua said.
The merger, under consideration since 2014, is part of the Chinese government’s programme of combining state factories and industries into fewer, larger groups to help them survive a slowing economy and weather competition with global rivals.
SCMP Infographics: The Central Asia gas pipeline
A similar consolidation took place in 2014 at China Tower Corporation, which combined the telephony and data transmission towers of China Mobile, China Unicom and China Telecom under one corporate entity. China Tower raised HK$58.8 billion four years later through an initial public offering in Hong Kong.
