PetroChina's Pipeline Business is Restructured, Focusing on Upstream Offshore Oil and Gas Exploration and Development

      According to news on September 11, China National Petroleum Corporation (hereinafter referred to as PetroChina) established a wholly-owned subsidiary, PetroChina Northern Pipeline Co., Ltd. on September 7, with a registered capital of 20 billion yuan. Its main business includes submarine pipeline transportation. For a long time in the past, the upstream businesses of PetroChina and Sinopec have concentrated on onshore oil and gas exploration, while CNOOC exclusively monopolized the right of domestic offshore oil exploration and development.
      In April 2004, the State Council decided to break the boundary between land and sea for domestic oil and gas exploration and development, and CNOOC could also land for oil and gas exploration and production activities. In October of the same year, in order to accelerate the exploration and development of offshore oil and gas resources, CNPC Offshore Engineering Co., Ltd. was established. Compared with onshore, offshore oil exploration is an increasingly high-risk, high-tech and high-investment field.
      After obtaining the China Coastal Exploration and Exploitation License issued by the former Ministry of Land and Resources in 2004, PetroChina's domestic offshore oil and gas exploration is mainly concentrated in the shallow sea areas of Dagang and Liaohe River, and there are also some offshore blocks overseas.
       On the evening of July 23, 2020, PetroChina announced that it planned to sell its major oil and gas pipelines, some gas storages, LNG receiving stations, and bottom oil and gas related assets (including the company's equity) to the National Pipeline Network Group (Kunlun Energy). Pipeline assets are not included in the scope of allocation), obtained 29.9% equity of National Pipeline Network Group, and became the largest shareholder of National Pipeline Network.
      Sinopec announced on the same day that the company and its subsidiaries intend to transfer the relevant company equity, oil and gas pipelines and supporting facilities held by them to the National Pipeline Network Group, with the additional equity and/or cash paid by the National Pipeline Network Group as the transaction consideration.
      The delivery date of the assets involved in the above announcement is September 30. This means that after the asset allocation is completed, the National Pipeline Network Group will be officially put into operation before the peak of the winter gas supply.
      At present, the delivery of national oil and gas pipeline network assets has entered the countdown, and nearly 400 billion assets of "two barrels of oil" are about to be injected into the national pipeline network group established in December 2019.
      PetroChina said that after the pipeline business reorganization, the company will focus more on upstream oil and gas exploration and development, and actively promote the development of oil and gas terminal markets. The establishment of PetroChina North Pipeline Co., Ltd., a wholly-owned subsidiary of PetroChina, is a preparation for upstream offshore oil and gas exploration and development.