CNOOC Inked Asset Transfer Agreement with COGPNC

SCI99

2020-04-02

CNOOC Inked Asset Transfer Agreement with COGPNC

According to the statements of CNOOC and COGPNC, on April 1, 2020, the two NOCs inked the asset transfer agreement, witnessed by the leadership of the two corporates, and the two parties held a meeting to discuss the details of the take-over and the schedule of follow-ups.

The terms of the agreement are not revealed yet, but according to previous speculation and market sources, CNOOC is considered to transfer at least five operable terminals and two proposed/contracting terminals to COGPNC, namely Tianjin Terminal, Yuedong Terminal, Diefu Terminal, Fangchenggang Terminal, Yangpu Terminal, Longkou Terminal (proposed) and Zhangzhou Terminal (under construction). Together with CNPC Dalian Terminal and Sinopec Beihai Terminal, COGPNC’s LNG receiving capacity will reach 24.6 Mtpa, taking up one third of China’s total LNG receiving capacity, and COGPNC is forging up a new LNG empire but with non-commercial and public service natures.

Since the establishment of the fourth national oil corporation last December, COGPNC is in talks with natural gas asset transfer with the other three (CNPC, Sinopec and CNOOC) actively and orderly. The asset list includes long-distance natural gas pipelines with capacity over 4 MPa, shares of provincial piping network companies owned by the three giants, many terminals and shares of terminals under NOC control, and a major part of natural gas underground storage facilities.

CNOOC is the first NOC responding to the asset transfer officially, and the market believes that is because CNOOC’s asset hand-over list is shorter and simpler than the other two. CNPC is in control of over 50,000 km pipelines, while CNOOC’s are only 3,000 km, most of which are offshore pipelines and not included in the transfer list. Meanwhile, as the largest LNG importer of China, CNOOC has the largest LNG terminal asset, and in the transfer list, most receiving capacity comes from CNOOC accordingly. SCI expects the whole asset transfer progress will take up around 1-2 years, and more vitality will be injected into China’s natural gas structural and marketization reform after the asset take-over and optimization.

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