By Yifan Wang

Two of China's energy giants have agreed to sell some of their assets in cash and share deals worth around $55 billion to a newly-created state juggernaut that China hopes will reform and unify its national energy-transmission network.

PetroChina Co. and China Petroleum & Chemical Corp., better known as Sinopec, have agreed to sell certain pipeline assets to China Oil & Gas Pipeline Network Corp., a state-owned firm founded late last year.

Beijing has been floating plans to centralize its energy pipeline network for years, as part of China's oil and gas market reforms to improve the industry's efficiency and resource allocation.

According to the terms of the deal, PetroChina will sell several major oil and gas pipelines, certain terminals and storage facilities to Pipeline Network for an expected total return of around $38.36 billion in equity and cash. Sinopec will sell some pipeline assets for $17.05 billion of shares and cash.

Once the transaction is completed, PetroChina will hold a 30% stake in Pipeline Network. Sinopec, together with subsidiaries, will subscribe to $9.99 billion of the national operator's registered capital, which is expected at around $71 billion after the proposed deals and other investments it plans to undertake.

The two oil majors separately announced the deals in stock exchange filings late Thursday.

The companies said the planned divestment will bring down debt levels, relieve capital expenditure pressures related to pipeline maintenance and expansion, and allow for more focus on their core exploration and refining businesses.

The proposed deals came after Sinopec's Hong Kong-listed unit, Sinopec Kantons Holdings Ltd., earlier this week agreed to sell a natural-gas pipeline for $460 million to the national pipeline company.

Shares of Sinopec and PetroChina closed 0.7% and 0.9% lower, respectively, on the Shanghai Stock Exchange Friday. In Hong Kong, Sinopec is down 1.2%, while Petrochina is up 1.4%. 



  Write to Yifan Wang at Yifan.Wang@wsj.com