(Bloomberg) -- China has chosen at least three banks to work on the formation of the planned national oil and gas pipeline company, according to people with knowledge of the matter.
BOC International Holdings Ltd., China International Capital Corp. and CLSA Ltd. have been picked as the advisers, said the people, who asked not to be identified because the information is private. Their tasks include extracting pipeline assets from the parent companies of the state's three listed oil and gas firms -- PetroChina Co., China Petroleum & Chemical Corp., known as Sinopec, and Cnooc Ltd. -- and setting up a new entity to hold the assets, the people said.
The national pipeline company would be provisionally named China Pipelines Corp., people familiar with the matter have said. Under the plan, state-controlled and private funds will inject capital sufficient to lower the combined stake held by the three oil majors to about 50%. The company may then file for an initial public offering, while details of the share sale could still change, the people said at that time.
China's State-owned Assets Supervision & Administration Commission is expected to be the biggest shareholder in the new company, while the three oil giants will also have stakes, one of the people said.
The creation of the company is part of President Xi Jinping's drive to streamline industrial capacity, especially among state-owned enterprises. The country has been considering centralizing pipeline operations since at least 2014, aiming to spur wider natural gas distribution and upstream exploration.
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PetroChina owns 76% of the roughly 65,000 kilometers (40,000 miles) of midstream natural gas pipelines, while 10% is held by Sinopec and 6% by China National Offshore Oil, analysts at Credit Suisse Group AG said in a June report. The remaining are owned by provincial governments or independent operators, they said.
Representatives for CLSA, the parent companies of Sinopec and PetroChina declined to comment, while Sasac and the parent of Cnooc didn't immediately respond to requests for comment. Representatives for BOCI and CICC also didn't immediately respond to requests for comment.
--With assistance from Carol Zhong and Feifei Shen.
To contact Bloomberg News staff for this story: Vinicy Chan in New York at vchan91@bloomberg.net;Crystal Tse in Hong Kong at ctse44@bloomberg.net;Steven Yang in Beijing at kyang74@bloomberg.net
To contact the editors responsible for this story: Fion Li at fli59@bloomberg.net, ;Shiyin Chen at schen37@bloomberg.net, Ramsey Al-Rikabi
©2019 Bloomberg L.P.
With assistance from Bloomberg
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