Overseas listed oil giant PetroChina is expected to launch the largest domestic share offering in the country as early as the end of this year to fund its west-east gas transmission project.
"We have been studying the possibilities of A-share listing, and soon will move to the (application) procedure," Wang Fucheng, vice-president of PetroChina, said Friday during the company's news briefing. "It is not impossible for us to launch the initial public offering in the A-share market around the end of this year.''
PetroChina's listing is expected to be the biggest ever fund raising in China's domestic stock market, Wang added.
The company's offering would exceed its rival Sinopec's proposed US$1.21 billion-worth domestic flotation, which is scheduled to debut next month, according to Wang.
Wang declined to disclose further information, but said "the proceeds will be used to finance the development and production of gas fields for the west-east gas transmission project.''
The US$14.5 billion project aims to build a 4,200-kilometer-long pipeline to transport gas from western China's Tarim Basin to energy-starved Shanghai.
At the news briefing, Wang also said PetroChina has discovered a big gas field with reserves estimated at 150 billion cubic metres in the Tarim Basin, which will help an adequate gas supply for the project.
As for the selection of foreign partners for the project, Wang said the work has been carried on as scheduled.
The company has appointed Deutsche Bank as the financial adviser in selecting the partners.
On Tuesday, PetroChina has invited two more foreign companies, a Russian consortium of PJSC Gazprom and PJSC Stroitransgaz and Hong Kong & China Gas Company, to participate in negotiations for the pipeline construction for the project. Bid winners will also be eligible to join hands with PetroChina to produce gas for the project.
Earlier this month, PetroChina invited the world's top three oil conglomerates, BP, Exxon Mobil and the Royal Dutch/Shell Group, to join the project.
"The selection of the second batch of negotiation partners does not mean we have encountered any setbacks in our talks with the three majors. The selection is just part of what we have planned for bidding,'' said Wang.
He said PetroChina has not yet received offers from Hong Kong & China Gas to form a consortium with Shell to join the bidding, but added that "if they do, PetroChina has no objection, as long as they give us a memorandum of understanding and tell us how they would work together.''
Wang's remark followed earlier reports that Hong Kong & China Gas would probably join bidding with Shell, which has initially bid on its own. Among the other two majors, BP leads a consortium that includes three Japanese companies and Malaysian Petronas while Exxon Mobil is linked with China Light and Power corp.
Earlier media reports indicated the negotiations are expected to end next month. The project will start construction in the fourth quarter of this year, and there will be gas in the line by 2003.
Shares of PetroChina, which was listed on Hong Kong and New York stock markets last year, closed flat Friday in Hong Kong at HK$1.62(20.7 US cents).
(China Daily 06/30/2001)
