Chinese state-owned oil company China National Petroleum Corp has concluded a complicated asset shuffle that allows state-owned steel mill Baosteel,…

Chinese state-owned oil company China National Petroleum Corp has concluded a complicated asset shuffle that allows state-owned steel mill Baosteel, two Chinese insurers and a number of funds to acquire stakes in three mammoth pipelines carrying gas across China

CNPC has long resisted plans by bureaucrats in Beijing to force it to open the pipeline network. But a sharp drop in oil prices has hit revenues at both the state-owned CNPC and its Hong Kong-listed unit PetroChina

Income at both entities has dropped “dramatically” this year, PetroChina president Wang Dongjin said in a statement on CNPC’s website this month

The sale is the next in a series of steps through which CNPC and PetroChina are consolidating a sprawling pipelines business

Beijing has indicated it could ultimately form a separate pipeline monopoly to encourage the development of China’s domestic natural gas industry which has so far been limited by CNPC’s stranglehold over the majority of the country’s pipeline network

The sale is an extension of a 2013 transaction in which PetroChina hived off an Rmb20bn stake in some of the pipelines to Baosteel and the other institutional investors to help raise money to complete the massive projects. At the time, that sale was hailed as part of a reform to allow non-energy companies into China’s tightly controlled state-owned energy sector

Last month, PetroChina sold a portion of its Trans-Asia Gas Pipeline business to state-owned asset holding company China Reform Holdings, for Rmb15bn-Rmb15.5bn

In a statement to the Hong Kong stock exchange on Thursday, PetroChina said it would consolidate three pipeline companies into PetroChina Pipelines, in which it would own 72.26 per cent. The other shareholders in the pipeline companies, dating from the 2013 investment, would take shares in the combined entity

After the deal, domestic fund management company Guolian will hold 5.33 per cent of the combined pipeline network. The National Social Security Fund and Taikang Life would each hold over 4 per cent while Baosteel and New China Life would each hold about 3.5 per cent. Five Chinese investment funds would hold the remainder

Beijing has presented such asset reshuffles as part of economic reforms but has proven very reluctant to throw open the strategically important oil and gas industry to private investment