SHANGHAI: State-owned Chinese oil giant PetroChina will sell half of a subsidiary that operates pipelines across central Asia for $2.4 billion, it said, raising hopes of possible reforms among nationalized firms.
PetroChina’s Trans-Asia Gas Pipeline has pipelines connecting China with countries including Kazakhstan, Uzbekistan, Tajikistan and Kyrgyzstan.
It is expected to have an 8,000 kilometer network with an annual capacity of 85 billion cubic meters by 2020.
The 50 percent stake will be sold to another state-owned firm, China Reform Holdings, PetroChina said in a statement to the Shanghai exchange late Wednesday.
While the transaction is between state-owned companies, and for only half the pipeline unit, spinning off non-core assets is seen as a positive sign for change in China’s lumbering state sector.
Vested interests are entrenched within it but the government has been pushing reforms as it seeks to bolster the economy to avoid a hard landing.
PetroChina and its huge parent company, China National Petroleum Corporation (CNPC), are seeking to meet government-set annual profit goals by selling assets, Bloomberg News reported, quoting people with knowledge of the situation.
PetroChina’s third quarter net profit slumped 81.4 percent year-on-year—albeit still more than $800 million—as China’s economic growth slowed to its worst for more than six years and on the back of tumbling global oil prices.
PetroChina closed down 0.11 percent in Shanghai on Thursday despite the announcement, but added 0.35 percent in Hong Kong.