South Korean utility and LNG player sells stake in China Gas Holdings to focus on Australia
SK E&S, a leading South Korean LNG operator and utility company, has sold its entire stake in a Chinese private natural gas company to improve its own finances amid the demand and prices drop in the energy industry.
The energy unit of SK Group said it sold all of its remaining 10.25 percent stake, amounting to 535 million shares, in China Gas Holdings through a block deal on the Hong Kong Stock Exchange, according to a regulatory filing.
The sale price was 1.80 trillion South Korean won (US$1.47 billion).
China Gas is the largest independent Chinese city-gas distributor and owner of over 550 filling stations for gas-powered vehicles.
The Chinese company has been in a partnership with Kunlun Energy, a subsidiary of LNG importer PetroChina, to connect households and businesses to city gas in China’s northeast provinces.
SK E&S said the move to sell the Chinese shares was aimed at improving its own financial structure as it also increases its energy investments in Australia.
It had previously sold a 3.3 percent stake in China Gas in September 2019 for 786.8 billion won. Currently, only its subsidiaries own stakes in CGH, totaling 1.45 percent.
The company is a unit of the SK Group, the third-largest conglomerate in South Korea, and a competitor to Korea Gas Corp, the largest LNG importer.
SK E&S, which has booked volumes from Freeport LNG in Texas, also has capacity at two South Korean import terminals, the Boryeong and Kwangyang facilities.
It is additionally a shareholder in the Barossa natural gas field development in Australia’s Northern Territory that will provide feed-gas for the Darwin LNG export plant at Wickham Point.
The shareholdings for that venture and Darwin LNG have changed after ConocoPhillips agreed to sell its Northern Australian assets to Adelaide-based energy and LNG player Santos.
Santos has signed agreement to sell a 25 percent interest in Darwin LNG to SK E&S.
It also sold a 12.5 percent interest in the Barossa filed development to the largest Japanese LNG importer, JERA Co. Inc.
