Kunlun Energy : INSIDE INFORMATION ANNOUNCEMENT ON POTENTIAL ASSET DISPOSAL TO CHINA OIL & GAS PIPELINE NETWORK CORPORATION

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KUNLUN ENERGY COMPANY LIMITED

(incorporated in Bermuda with limited liability)

昆 侖 能 源 有 限 公 司

(Stock Code: 00135.HK)

INSIDE INFORMATION

ANNOUNCEMENT ON POTENTIAL ASSET DISPOSAL TO

CHINA OIL & GAS PIPELINE NETWORK CORPORATION

This announcement is made by Kunlun Energy Company Limited (the "Company", together with its subsidiaries, the "Group"), pursuant to Rule 13.09(2) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") and the Inside Information Provisions (as defined under the Listing Rules) under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

Reference is made to the announcement of the Company dated 10 December 2019, in relation to the establishment of China Oil & Gas Pipeline Network Corporation ("PipeChina") and the potential disposal of some pipeline assets to PipeChina by the Group (the "Potential Asset Disposal"). The Company understands that PipeChina has also negotiated with PetroChina Company Limited, China Petroleum & Chemical Corporation and Sinopec Kantons Holdings Limited on certain reorganization of pipeline assets, and recently reached formal agreements with these companies respectively.

The board of directors (the "Board") of the Company hereby announces that, as at the date of this announcement, the Company is still negotiating with PipeChina, relevant details have not been finalized, and the Company has not eventually reached consensus with PipeChina on the Potential Asset Disposal. The Company will continue to comply with applicable laws and regulations (including but not limited to the Listing Rules), adhere to the rules of fairness, equality and marketization, and focus on the interests of the shareholders of the Company as a whole as well as the future plan of the Group in terms of development and strategy, so as to orderly promote and implement the Potential Asset Disposal.

The Board wishes to emphasize that although the Group's current pipeline business may be impacted if the Potential Asset Disposal is materialized, the Group will strive to seize the development opportunities in the natural gas market in China and focus on expanding retail sales market to continuously enhance corporate values and bring more returns to the shareholders.

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The Company will make further announcements as appropriate in accordance with the applicable laws and regulations in due course.

Shareholders and potential investors of the Company are advised that, the Potential Asset Disposal may or may not be carried out or materialized. Shareholders and investors of the Company are advised to follow the announcements issued by the Company and to exercise caution when dealing in the securities of the Company.

By the Order of the Board

KUNLUN ENERGY COMPANY LIMITED

Ling Xiao

Chairman

Hong Kong, 23 July 2020

As at the date of this announcement, the Board of Directors comprises Mr. Ling Xiao as the Chairman and Executive Director, Mr. Zhao Yongqi as the Chief Executive Officer and Executive Director, Mr. Zhou Yuanhong as Executive Director, Mr. Miao Yong as Chief Financial Officer and Executive Director, and Dr. Liu Xiao Feng, Mr. Sun Patrick and Mr. Tsang Yok Sing Jasper as Independent Non- Executive Directors.

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