China's Sinopec Corp. said on Aug. 2 that it would sell half of its premium natural gas pipeline business to investors, a move spurred by Beijing's reform push to boost efficiency and increase infrastructure investment in cleaner fuel.

Sinopec, the country's second-largest oil and gas group, said it would hold 50% in the Sichuan-East China Pipeline project after the completion of the divestment plan that has won board approval.

It did not give a value of the target assets, or a timeline for when the sale would be completed.

The government is keen to boost investment in the country's patchy 90,000-kilometer (km) gas grids, which are less than one-fifth the size of the system in the U.S. This has created a major bottleneck that limits consumption of gas, which has half the greenhouse-gas emissions of China's biggest energy source, coal.

Sinopec has said it spent 62.7 billion yuan (US$9.45 billion) to build the pipeline that runs 2,200 km (1,370 miles) from the southwestern province of Sichuan, a top gas producing basin, to Shanghai on the east coast.

Its Sichuan-East China Pipeline project, which started commercial operation in 2010, is able to carry about 12 billion cubic meters of natural gas a year, or about 6% of the country's total gas consumption.

Industry experts said Sinopec's plan, which was announced seven months ago and is similar to the plan of PetroChina, its larger domestic rival, was a prelude to reform packages Beijing is expected to roll out that target sectors including oil and gas pipelines.

One of the government reforms on the agenda, experts said, would likely be to break the dominance of PetroChina and Sinopec over key pipeline assets, and also cut the state-supervised transportation costs.

"It's a good time for Sinopec to recoup at least part of its investment over the years and finance more pipeline capacity building while still able to maintain a controlling stake," said Li Yao, founder and CEO of Beijing-based consultancy SIA Energy.

Under the reform plans, the two energy giants would also be under pressure to separate gas transportation from sales, which they currently bundle together. This would effectively lower the cost of fuel for consumers and allow third-party access, experts said.

Sinopec's pipeline sale is likely to attract institutions or funds that are seeking steady, fixed returns, Li said.

After PetroChina's pipeline spinoff at the end of last year, the company held 72.26% in a restructured pipeline division, called PetroChina Pipeline, while other partners including institutional investors and non-state firms held the remaining 27.74%. (US$1 = 6.6336 Chinese yuan renminbi)