By Scott Patterson

Glencore PLC, one of the world's biggest oil traders, has agreed to sell a majority stake in its petroleum products storage and logistics business for $775 million in cash to Chinese conglomerate HNA Group.

The move comes as China's demand for oil storage ramps up amid rising consumption by its expanding urban population. China is the world's second largest oil consumer, behind the U.S.

HNA Group will purchase a 51% stake in the petroleum business, which will be called HG Storage International Ltd. The deal is subject to regulatory approvals and is expected to close in the second half of the year.

Switzerland-based Glencore said the joint venture would be present in major trading hubs across the world, including in Europe, Africa and North and South America.

The deal appears to allow Glencore to maintain the market insight that traders can glean from oil storage, while adding to its cash horde.

The company continues to try to cut its debt as it looks to reinstate its dividend and scans the market for potential investments. Earlier in March, Glencore entered a deal to sell stakes in a pair of zinc mines for $400 million.

HNA Group, owned by Chinese tycoon Chen Feng, is a sprawling Chinese conglomerate with assets spanning hotel chains, supermarkets and shipping firms.

HNA has been active recently, acquiring a sizable stake in troubled German lender, Deutsche Bank.

Write to Scott Patterson at scott.patterson@wsj.com

(END) Dow Jones Newswires

March 31, 2017 11:52 ET (15:52 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.
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