China hires Morgan Stanley, Goldman Sachs to advise on pipeline asset transfers: sources

[HONG KONG] Top Chinese energy firms have mandated investment banks Morgan Stanley and Goldman Sachs to act as advisers 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 US$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.

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

For the new pipeline group itself, China International Capital Corporation, or CICC, has been appointed as adviser, 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.

REUTERS