Morgan Stanley, Goldman Sachs to Advise China on Pipeline Asset Transfers

Kane Wu and Julie Zhu
Wednesday, July 8, 2020

Top Chinese energy firms have mandated investment banks Morgan Stanley and Goldman Sachs to act as advisors for multi-billion dollar deals transferring key oil and gas pipeline assets into a national energy infrastructure giant, four sources said.

Overseen by a government vice premier, underlining the project's importance for Beijing, Beijing aims to complete the asset transfers and start operation of the new entity - valued by industry analysts at more than $40 billion - by the end of September, oil industry officials said.

"The timetable is a moving target but the goal was to complete the (asset) merger by end of July," one person with direct knowledge of the matter told Reuters.

The mandates come after China announced in late 2019 that it would establish an entity known as National Oil and Gas Pipeline Company by combining pipelines, storage facilities and natural gas receiving terminals operated by China National Petroleum Corp (CNPC), China Petrochemical Corp (Sinopec Group) and China National Offshore Oil Company (CNOOC).

The new entity - also known as PipeChina - was conceived by Beijing as a means to provide oil and gas producers neutral access to energy infrastructure, and in so doing boost non-state investment in exploration of oil and gas.

Morgan Stanley has been picked to advise Sinopec, according to two sources with direct knowledge of the matter. Two separate sources said Goldman Sachs was selected for CNPC for the asset transfer.

It was not immediately clear if CNOOC has appointed an international advisor.

For the new pipeline group itself, China International Capital Corporation, or CICC, has been appointed as advisor, according to three separate sources.

All of the people interviewed by Reuters requested anonymity because the matter was not public.

PetroChina, Sinopec and CNOOC did not immediately comment.

On the banks side, Morgan Stanley declined to comment, while Goldman and CICC did not immediately comment.

According to some industry insiders, the transfer of some of the assets, such as the Shaanxi-Beijing gas trunk line project and natural gas receiving terminals that involve joint venture partners and minority stakeholders, may take longer to complete. 

(Reporting by Kane Wu and Julie Zhu in Hong Kong, and Zoey Zhang, Muyu Xu and Cheng Leng in Beijing; Additional reporting and writing by Chen Aizhu in Singapore; Editing by Kenneth Maxwell)

Categories: Energy Pipelines Industry News Activity Asia China

Related Stories

ConocoPhillips, CNOOC Put Penglai Field off China Into Full Operation

Fugro Secures India Deepwater Drilling ROV Contract

Subsea7 Lands ‘Sizeable’ Contract for Work Offshore Brunei

Borr Drilling's Mexican JV Expands Fleet with Five Jack-Ups

Serica Energy Agrees $194M Pharos Energy Acquisition

ABL Gets Papua New Guinea FSO Job

Oil Rises on Dual Shipping Threat in Hormuz and Red Sea

Searah Malaysia Starts Upstream Oil and Gas Operations

Oil Rises 2% as Middle East Hostilities Escalate

Post-War Gulf Faces Push for Alternative Export Routes

Current News

ConocoPhillips, CNOOC Put Penglai Field off China Into Full Operation

Mermaid Maritime Expands Into US Offshore Market

ONGC Nears Venezuela Operatorship Deals, Regains Russia’s Sakhalin-1 Stake

Fugro Secures India Deepwater Drilling ROV Contract

Vantris Energy Secures Petronas’ Offshore Drilling Work Orders

ADNOC, SLB Roll Out AI Platform Across More Than 120 Drilling Rigs

Oil Rises as Uncertainty Clouds US-Iran Peace Talks

India’s ONGC to Allocate Half of New Oil Storage to Strategic Reserves

Subsea7 Lands ‘Sizeable’ Contract for Work Offshore Brunei

FPSO for Azule Energy’s Angola Offshore Field Starts Taking Shape in China

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com