China National Petroleum Corp (CNPC), parent of PetroChina, has acquired a majority stake in a gas distributor owned by the Zhuhai municipal government in a move seen to counter a recent alliance between rivals China National Offshore Oil Corp and China Petrochemical Corp.
CNPC had bought an 85 per cent stake in Zhuhai Piped Gas, a unit of Zhuhai Gas Group, for 57.5 million yuan, a Zhuhai Piped Gas official said. Representatives of CNPC and PetroChina could not be reached.
Zhuhai Piped Gas distributes and imports liquefied petroleum gas and has 12 LPG gasification stations. Zhuhai Gas Group's annual gas sales were 250,000 tonnes last year.
The deal marks a strategic change for CNPC, which focuses on upstream gas production and wholesaling without retail exposure.
'This is likely a response to the competitive pressure from the China National Offshore-China Petrochemical alliance,' said an executive at a foreign oil and gas firm.
CNPC is a minor player in southern China's energy market but is building up its presence to break China Petrochemical's dominance.
China National Offshore, China Petrochemical and the Guangdong provincial government last week signed a framework agreement to set up a gas distribution company to build and operate a gas distribution network in the province. Officials said investment and operation details were still being discussed.
China Petrochemical, parent of China Petroleum & Chemical (Sinopec), has a fuel distribution network in southern China, while China National Offshore, parent of CNOOC, has built a liquefied natural gas terminal and distribution pipeline in the Pearl River Delta region.