Kunlun to use PipeChina cash for downstream growth

An exit from the midstream gives the PetroChina subsidiary a war chest and proves the logic of the country’s gas market rationalisation

The multibillion-dollar sale of key gas supply infrastructure by China’s Kunlun Energy paves the way for the firm to focus on its burgeoning downstream businesses, including city gas distribution and coal-to-gas switching among industrial users. Kunlun agreed in December to sell its 60pc stake in four long-distance pipelines that transport gas to Beijing and a 75pc interest in the Dalian LNG import terminal for CNY40.9bn ($6.36bn) to PipeChina, the state-controlled midstream oil and gas company launched last year. The all-cash sale comes months earlier than industry analysts had expected. The four Shaanxi-Beijing pipelines transported 26.2bn m³ of gas in the first half of 2020, which was equ