Sinopec Sells 50% Stake in Gas Pipeline for $3.3bn

Chinese state owned energy major Sinopec said December 12 that China Life Insurance and a unit of State Development & Investment Corp. will pick up 50% stake in the Sichuan to East China gas pipeline for yuan $22.8bn ($3.3bn).

China Life Insurance would own a 43.86% stake while SDIC's unit would have a 6.14% share.

Sinopec said the proceeds from the sale would be used for further development of the pipeline. “Raising funds for future development of the Sichuan to East China gas pipeline project through the injection of external capital will promote the development of the natural gas business of Sinopec Corp. By introducing external investors, the corporate governance structure will be further improved and the market-oriented reforms will be promoted to facilitate sustainable and steady development of Sinopec Corp.”

The 2,200 km pipeline carries gas from Sichuan to Shanghai. It has a capacity to transport 12bn cm³ of gas every year. The pipeline was completed in 2010.

Shardul Sharma