CNPC plans to acquire three gas storage companies—Xinjiang Gas Storage, Xiangguosi Gas Storage, and Liaohe Gas Storage—for 40 billion yuan

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On the evening of August 26, China National Petroleum Corporation announced that it intended to acquire all shares of the Xinjiang Gas Storage Facility, Xiangguosi Gas Storage Facility, and Liaohe Gas Storage Facility, at a total cost of 40.016 billion yuan. According to the announcement, Taihu Company, a wholly-owned subsidiary of PetroChina, plans to contribute cash together with relevant joint venture partners to establish three new joint venture companies controlled by Taihu Company. The newly established joint venture plans to invest 9.995 billion yuan, 17.066 billion yuan, and 12.955 billion yuan respectively to acquire 100% of the equity in Xinjiang Oilfield Gas Storage Company, Xiangguosi Gas Storage Company, and Liaohe Oilfield Gas Storage Company – all wholly-owned subsidiaries of China National Petroleum Corporation – in order to take ownership of the related gas storage assets. CNPC stated that gas storage facilities are an important link and connecting element in the production, transportation, storage, and sales of natural gas, and they serve as tools for regulating natural gas sales to balance supply and demand as well as for ensuring balanced production from gas fields. By acquiring 100% of the shares in three gas storage companies, the firm can add 10.97 billion cubic meters of storage capacity, which will help to establish a gas storage capacity that matches the company’s natural gas sales volume. This will enable effective regulation and maximize the overall efficiency of the natural gas industry chain. On the same day, CNPC also released its semi-annual report, showing that it achieved operating revenue of 1.5 trillion yuan in the first half of the year, with a net profit attributable to shareholders of the parent company amounting to 84.01 billion yuan.