Kunlun Secures LNG Access Through PetroChina Deal: Update

Updates with a second equity transaction involving Jingtang in the space of a week (see final paragraph)

Hong Kong-listed gas distributor Kunlun Energy said its unit, Kunlun Gas, has agreed to purchase 51% equity interest in Jingtang Company for yuan 1.5bn ($232.3mn) in cash from PetroChina. 

PetroChina is also the parent company of Kunlun Energy.

The acquisition will give Kunlun access to all of the three LNG receiving terminals of PetroChina, which the company says "is in line with its business positioning and development strategies" although it did not say how much capacity it will get.

“In addition, the acquisition will generate synergies among different businesses of the company, enhance its cost control, improve its efficiency and profitability, facilitate the improvement of its internal business structure and create new business growth,” Kunlun said September 28.

Jingtang was jointly established by PetroChina, Beijing Enterprises Group Company and Hebei Natural Gas Company in 2012 and is engaged in LNG terminal operation, storage and regasification services as well as providing port facilities for vessels.

Kunlun is particularly active as a marketer of gas and LNG to China's 4mn-plus natural gas vehicle fleet, and owns and operates several small-scale liquefaction units across China to supply LNG to such trucks and buses. It also owns nine oilfields in seven countries: China, Kazakhstan, Oman, Peru, Thailand, Azerbaijan and Indonesia.

Update as of October 3: Hong Kong-listed Beijing Enterprises Holdings said October 2 it too has agreed to buy a equity stake in Jingtang Company, this time a 29% interest for yuan 956.97mn ($145mn) from its parent company Beijing Enterprise Group.

Shardul Sharma