PetroChina : Discloseable Transaction Connected Transaction

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Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this document, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this document.

中國石油天然氣股份有限公司

PETROCHINA COMPANY LIMITED

(a joint stock limited company incorporated in the People's Republic of China with limited liability)

(Stock Code: 857)

DISCLOSEABLE TRANSACTION CONNECTED TRANSACTION

Financial Advisers

The Board is pleased to announce that the Company proposed to use its wholly-owned subsidiary, PetroChina Pipelines, as a platform to integrate the Target Companies. Upon completion of the integration, the Company will own 72.26% equity interests in PetroChina Pipelines, which will own 100% equity interests in the Target Companies.

To effect the integration, PetroChina Pipelines, as the acquirer, has entered into a series of acquisition agreements with the Company and the Other Transferors on 24 December 2015. Pursuant to such agreements, PetroChina Pipelines agrees to acquire, and the Company and the Other Transferors agree to sell, the equity interests of the Target Companies held by them respectively, in consideration of the equity interests of PetroChina Pipelines or cash.

CNPC is the controlling shareholder of the Company and holds 50% of the equity interests of GCLI, one of the Other Transferors. Pursuant to the Listing Rules, GCLI is an associate of CNPC and thus a connected person of the Company. Therefore, the acquisition by PetroChina Pipelines of the 1.39% equity interests held by GCLI in

United Pipelines (one of the Target Companies) shall constitute a connected transaction of the Company.

Since one or more of the applicable percentage ratios for the Transaction under the Listing Rules are more than 5% but less than 25%, the Transaction constitutes a discloseable transaction, which is subject to the reporting and announcement requirements and is exempt from the shareholders' approval requirement under the Listing Rules.

Since one or more of the applicable percentage ratios for the connected transaction are more than 0.1% but less than 5%, such connected transaction is subject to the reporting and announcement requirements and is exempt from the independent shareholders' approval requirement under the Listing Rules.

I. EQUITY ACQUISITION AGREEMENT

1. Date

   
   

   24 December 2015

   
   

2. Parties

   
   

   Acquirer: PetroChina Pipelines

   
   

   Sellers: the Company, Guolian Fund, NCSSF, Taikang Life, Baosteel, New China Life, Jiaxing Nongying, Youngor, Zhuhai Rongyou, Hwabao Investment, Jiaxing Zhuorui, and GCLI

   
   

3. Assets to Be Acquired

   
   

   Pursuant to the Equity Acquisition Agreement, PetroChina Pipelines agrees to acquire, and the Company and the Other Transferors agree to sell, the equity interests of Target Companies held by them, respectively (save as 13.19% equity interests in United Pipelines held by Taikang Assets, 1.67% and 9.6% equity interests in United Pipelines and Northwest United held by Guolian Fund respectively, which will be acquired by PetroChina Pipelines in cash as set out below).

   
   

   The obligations of the Company and each of the Other Transferors under the Equity Acquisition Agreement to sell the equity interests of the Target Companies held by them are several and not inter-conditional on each other.

   
   

4. Consideration

   
   

   PetroChina Pipelines shall pay consideration in form of its equity interests to the sellers under the Equity Acquisition Agreement.

   
   

   Prior to the Transaction, the Company holds 100% equity interests in Eastern Pipelines, 50% equity interests in United Pipelines and 52% equity interests in Northwest United, which, as agreed among the parties, will account for 72.26% of the enlarged share capital of PetroChina Pipelines after the Transaction. The total equity

   interests held by the Other Transferors in the Target Companies (save as 13.19% equity interests in United Pipelines held by Taikang Assets, 1.67% and 9.6% equity interests in United Pipelines and Northwest United held by Guolian Fund respectively, which shall be acquired by PetroChina Pipelines in cash as set out below) will account for 27.74% of the enlarged share capital of PetroChina Pipelines after the Transaction.

   
   

   Following the completion of the Transaction, the registered capital of PetroChina Pipelines shall be increased from RMB50 million to RMB80 billion.

   
   

   For details of the equity interests held by each of the Other Transferors in the Target Companies prior to the Transaction, please refer to the information set out in the paragraph headed "Target Companies" below.

   
   

   The considerations of the Transaction (including the cash consideration in the other equity transfer agreements as set out below) were negotiated and entered into by all parties on an arm's length basis and on normal commercial terms with reference to the valuation results of the equity interests of the Target Companies prepared by the Valuer as of the Reference Date and adjusted by the capital increase or deduction and dividends payment after the Reference Date.

   
   

   Pursuant to the valuation results as of 30 June 2015, being the Reference Date, the appraised value of shareholders' equity interests of Eastern Pipelines is RMB88,415 million, the appraised value of shareholders' equity interests of Northwest United is RMB69,030 million, the appraised value of shareholders' equity interests of United Pipelines is RMB123,922 million. The valuation results have been filed according to the relevant filing procedural requirements from the State-owned Assets Supervision and Administration Commission of the PRC.

   
   

5. Valuation Methodology

Pursuant to the valuation reports prepared by the Valuer as of the Reference Date, the valuations have adopted an income method, which accordingly constitute profit forecasts under Rule 14.61 of the Listing Rules. As a result, both Rules 14.60(A) and

14.62 of the Listing Rules will apply. The principal assumptions, including those commercial assumptions, upon which the valuations were based on, are set out in appendix I.

The Company considers the valuation assumptions that the Valuer has relied on in its valuation reports are reasonable on the basis that the Company does not expect that there will be material changes to the operation as well as the business environment of the Target Companies (e.g. there will be no material change to the operating environment, the business scope, the business model and business orientation of each of the Target Companies; the management team will continue to carry forward their development; and the supply of natural gas will remain stable).

The respective report and letter from the Overseas Auditor and the Financial Advisers of the Company issued pursuant to Rules 14.62(2) and 14.62(3) of the Listing Rules have been included in the appendix II to this announcement.

Set out below are the qualifications of the experts who have given their opinions or advices included in this announcement:

Name	Qualification
KPMG	Hong Kong Certified Public Accountant
Goldman Sachs (Asia) L.L.C.	A licensed corporation licensed under the Securities and Futures Ordinance to carry out Type 1 (dealing in securities), Type 4 (advising on securities), Type 5 (advising on future contracts), Type 6 (advising on corporate finance) and Type 9 (asset management) regulated activities
China International Capital Corporation Hong Kong Securities Limited	A licensed corporation licensed under the Securities and Futures Ordinance to carry out Type 1 (dealing in securities), Type 2 (dealing in futures contracts), Type 3 (leveraged foreign exchange trading), Type 4 (advising on securities), Type 5 (advising on future contracts) and Type 6 (advising on corporate finance) regulated activities within the meaning of the Securities and Futures Ordinance

As at the Latest Practicable Date, Goldman Sachs (Asia) L.L.C. and its affiliates held 278,433,225 shares, representing approximately 0.15% of the total issued share capital of the Company, and held 49,784,654 shares, representing approximately 0.62% of the total issued share capital of Kunlun Energy Company Limited, a subsidiary of the Company.

As at the Latest Practicable Date, China International Capital Corporation Hong Kong Securities Limited (CICCHKS) held, on behalf of its clients, 1,750,000 Shares, representing approximately 0.001% of the total issued share capital of the Company, and held, on behalf of its clients, 26,442,000 shares, representing approximately 0.328% of the total issued share capital of Kunlun Energy Company Limited, a subsidiary of the Company. Separately, CICC Financial Products Ltd., a wholly owned subsidiary of CICCHKS, also held 52,044,000 Shares, representing approximately 0.028% of the total issued share capital of the Company, and held 6,000 shares, representing approximately 0.0001% of the total issued share capital of Kunlun Energy Company Limited, a subsidiary of the Company.

Save as disclosed above, as at the Latest Practicable Date, none of the above-mentioned experts has any shareholding in the Company or any of its subsidiaries, or any right to subscribe, or nominate any other person to subscribe, for any securities of the Company or any of its subsidiaries (whether legally exercisable or not).

The above-mentioned experts have consented in writing to the inclusion of their letters or reports or the reference to their names in the forms and contents as set out herein and have not withdrawn such consent.