China Oil & Gas Pipeline Network Corporation entered into an agreement to acquire 75% stake in PetroChina Dalian LNG Co., Ltd. and 60% stake in PetroChina Beijing Gas Pipeline Co., Ltd. from Kunlun Energy Company Limited (SEHK:135) for CNY 40.9 billion on December 22, 2020. Consideration will be payable in cash subject to the adjustments. The consideration shall be settled in two installments: the first installment: within 20 days after the closing date, amount equal to 85% of the appraised value and second installment: within 15 business days after the completion of the closing audit. If Kunlun Energy fails to complete the change of registration for industry and commerce of the target companies within the agreed time in accordance with the requirements, Kunlun Energy shall pay an overdue penalty amounting to 0.05% of the amount already paid by PipeChina to Kunlun Energy per day except where the delay is not attributed to Kunlun Energy but to (including but not limited to) the force majeure, PipeChina or any other third parties. If PipeChina fails to pay the consideration of the Transaction in accordance with the equity transfer agreement, PipeChina shall pay an overdue penalty amounting to 0.05% of the unpaid amount from PipeChina to Kunlun Energy per day except where the failure is not attributed to PipeChina but to (including but not limited to) the force majeure, Kunlun Energy or any other third parties. As of September 30, 2020, PetroChina Beijing and PetroChina Dalian had combined net assets worth CNY 33.7 billion and combined total assets worth CNY 45.25 billion. Upon completion of the transaction, Kunlun Energy will cease to hold any equity interests in PetroChina Beijing and PetroChina Dalian. The transaction is subject to approval from Kunlun Energy, PetroChina Beijing, PetroChina Dalian and PipeChina in accordance with its constitutional documents and regulatory requirements of the relevant regulatory bodies (such as the Stock Exchange; other shareholders of the target companies having waived in writing their first refusal right in respect of the target shares and all other approvals, permits, filings and registrations. As on March 12, 2021, the transaction was approved by shareholders of Kunlun Energy. Kunlun Energy expects to apply the proceeds as (1) approximately 50% of the net proceeds will be used for the dividend distribution to the shareholders of Kunlun Energy, (2) approximately 40% of the net proceeds will be used for developing the natural gas end-user sales business of Kunlun Energy and (3) approximately 10% of the net proceeds will be used for the repayment of existing debts and the general operations of Kunlun Energy Group. As of March 23, 2021, Kunlun Energy Company Limited’s board recommends applying the proceeds from transaction as special dividend of CNY 213.66 cents per share. China Securities (International) Corporate Finance Company Limited acted as financial advisor and KPMG acted as accountant for PetroChina Company Limited, parent of Kunlun. China United Assets Appraisal Group Co., Ltd. acted as valuer in the transaction. HSBC acted as the financial advisor to Kunlun Energy Company Limited (SEHK:135). J.P. Morgan Securities acted as financial advisor to Kunlun Energy Company. BOC International (Asia) Limited acted as the financial advisor to China Oil & Gas Pipeline Network Corporation.