All assets of the new company - worth 82 billion yuan ($13.1 billion) - will then be sold by public tender on an asset exchange on the Chinese mainland.
The new company will be established in Shanghai with registered capital of 10 billion yuan.
Its pipeline network delivers natural gas to China's eastern cities from Central Asia and the Xinjiang Uygur autonomous region.
Industry insiders described this move as a big step forward in China's mixed ownership reform among State-owned enterprises in the energy sector.
Duan Zhaofang, a natural gas expert with CNPC's research institute, said the huge investment required for pipeline construction calls for a diverse range of investors.
Wang Ruiqi, senior analyst with the energy information consultancy ICIS C1 Energy, said the central government is trying to cut the energy giants "down to size" by spinning off their assets in order to weaken the chain of corruption.
Since September, at least seven high-ranking officials relating to CNPC including Jiang Jiemin, former CNPC chairman, have been probed for corruption-related charges.
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| CNPC starts drilling in natural gas reservoir |
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