CNPC to bring gas units under one fold

Energy producer China National Petroleum Corp is seeking to combine units to create a single gas company to compete with private rivals, ahead of an inflow of Russian fuel at the end of the decade, according to two company officials familiar with the project.

The plan under consideration would be for CNPC's Hong Kong - listed unit Kunlun Energy Co Ltd to buy unlisted PetroChina Kunlun Gas Co, the two people said, asking not to be named as the discussions are not public. Kunlun Energy is CNPC's main commercial gas supplier in China, while Kunlun Gas distributes fuel to households in more than 100 Chinese cities. Both companies are housed within PetroChina Co, State-owned CNPC's largest listed unit.

Kunlun Energy could pay more than $3 billion for Kunlun Gas, according to one analyst's estimate. The asset injection is being discussed for the second half of the year although precise timing has not been decided, company officials said.