China Gas sees bumper sales growth, to ex­pand grid

The com­pany plans to lay 20,000 to 30,000 km of pipe­line ev­ery year over the next three to ive years

The Gulf Today - Business - - VIEWPOINT -

BEI­JING: China Gas Hold­ings, one of China’s largest do­mes­tic nat­u­ral gas dis­trib­u­tors, ex­pects sales to rise 30-45 per cent this fis­cal year and “sus­tain­able high growth” the next few years due to Bei­jing’s clean air push, the com­pany’s founder said.

China Gas, which counts South Korea’s SK Group and In­dia’s GAIL among its in­vestors, plans to ex­pand its ex­ten­sive pipe­line net­work, and is in talks with po­ten­tial part­ners on build­ing its first re­ceiv­ing ter­mi­nal for im­ported liq­ue­fied gas, Liu Minghui, the com­pany’s founder and pres­i­dent, told Reuters in an in­ter­view last week.

Liu did not give the com­pany’s out­right gas sales vol­ume for the fi­nan­cial year to end March 2018, but es­ti­mated his com­pany makes up 8-9 per cent of China’s to­tal gas con­sump­tion.

China, the world’s third-big­gest gas con­sumer, will burn 240 bil­lion cu­bic me­tres (bcm) of the cleaner­burn­ing fuel this year, up 15 per cent ver­sus 2016 in the na­tion’s fastest growth since 2011, ac­cord­ing to con­sul­tancy SIA En­ergy. The growth in use is fu­elled by Bei­jing’s pro­gramme to heat mil­lions of homes with gas this win­ter in some 30 north­ern cities.

Liu, who set up China Gas in 2002 and holds the sec­ond-largest block of shares af­ter state-run Bei­jing En­ter­prises Hold­ings, said the com­pany plans to lay 20,000 to 30,000 km of pipe­line ev­ery year over the next three to five years.

The com­pany now op­er­ates some 140,000 km of nat­u­ral gas pipe­line, enough to go around the earth 3-1/2 times.

“As a lead­ing firm in the gasi­fi­ca­tion pro­gramme this year... at one point we had 50,000 work­ers lay­ing pipes in He­bei alone,” said Liu, re­fer­ring to the smoggy north­ern Chi­nese prov­ince that is the fo­cal area for gasi­fi­ca­tion.

Liu said this year’s pro­gramme is only a start, as the Na­tional De­vel­op­ment and Re­form Com­mis­sion (NDRC), China’s top eco­nomic plan­ner, has started study­ing a more am­bi­tious plan to use gas as the win­ter heat­ing fuel in 14 north­ern prov­inces.

To meet surg­ing de­mand for the fuel, China Gas, which has re­lied on state en­ergy firms for gas sup­plies, last week agreed with Delfin Mid­stream to ex­plore the pos­si­bil­ity to im­port liq­ue­fied nat­u­ral gas (LNG) from the United States.

With its pipe­line grid reach­ing 400 cities, China Gas is plan­ning to in­vest or build an LNG ter­mi­nal in the coun­try’s south, join­ing the ranks like pri­vately-run ENN En­ergy Hold­ings and Xin­jiang Guanghui to op­er­ate im­port ter­mi­nals, which so far have been dom­i­nated by state en­ergy gi­ants.

Liu give no fur­ther de­tails on the plan to ex­plore build­ing an LNG ter­mi­nal.

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