China Petroleum & Chemical Corporation or Sinopec has filed a plan in the Hong Kong stock exchange to sell its 50% stake of Sichuan to East China gas pipeline to China Life Insurance and a unit of State Development & Investment (SDIC).
From this sale, Sinopec expects to raise $3.3bn, reported the Wall Street Journal.
This initiative is a part of the reform process pushed by the Chinese government and to bolster the performance of the country’s struggling oil and gas sector.
The 1,400 mile Sinopec gas pipeline extends through eight Chinese regions and transports approximately 12 billion cubic metres of natural gas annually.
It delivers natural gas to the eastern cities from its sources located in central China.
The pipeline is expected to act as a crucial infrastructure in the coming years when demand of natural gas is likely to witness a rise.
Sinopec was impacted severely due to low global oil prices.
This sale will help to bolster its earnings.
As per the sale terms, China Life Insurance will hold about 44% stake while SDIC will own around 6%, the publication reported.
China is planning to shift slowly towards natural gas as the primary source of energy from coal.
Image: Sinopec Headquarters in Beijing, China. Photo: Courtesy of WhisperToMe / Wikipedia