The main Chinese national oil company, the China National Petroleum Corporation (CNPC), plans to create a new investment vehicle to accelerate the development of its renewable energy portfolio.
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The new investment vehicle, CNPC Kunlun Capital, will have registered capital of 10 billion yuan ($ 1.54 billion) to focus on investments in so-called emerging industries.
CNPC Kunlun Capital, which will be incorporated in Beijing or Hainan province, will have a three-tier shareholding structure, with the listed subsidiary of CNPC PetroChina at 29%, CNPC at 51% and CNPC Capital at 20%.
The three companies have pledged to inject all of the funds into the new company within three years.
The new entity will be a major investment vehicle for CNPC to implement its new strategy to focus more on green and low carbon development.
In April, CNPC announced its intention to reorganize its nine business segments into four subsidiaries while continuing its energy transition approach. The four units cover: oil, gas and new energies; refining, sales and new materials; support and service; and capital and finance.
This is the first time that CNPC has placed the development of new energies on an equal footing with oil and gas in terms of commercial priorities.
President Dai Houlaing said CNPC will take a three-step approach to achieve its own goal of peaking carbon emissions in 2025 and net zero emissions in 2050.
As a first step, CNPC will maximize its gas operations by increasing the gas portfolio in its energy mix to 55% by 2025.
Dai said CNPC will encourage solar and wind power projects in oil and gas blocks authorized by the Chinese government.
The company will also apply carbon capture and storage technology to reduce emissions and replace fossil fuels with renewable energy.