Temasek enters China gas market
Temasek Holdings of Singapore has reached an understanding to acquire up to 10 per cent of China Gas Holdings, extending its investment into the mainland's burgeoning gas market.
The Singapore government's investment flagship and fashion retailer turned gas service supplier China Gas signed a memorandum of understanding on Monday, paving the way for a share transaction and joint investment in piped-gas projects in the mainland.
Although details of the deal are pending further discussions, news of the possible tie-up lifted China Gas shares 1.53 per cent to $1.32 yesterday.
Temasek, through its wholly owned utility City Gas, is destined to be the second strategic shareholder that China Gas has teamed up with after H-share company Sinopec Corp acquired a 10.61 per cent stake in the gas firm for $128.1 million in November last year.
'The directors wish to emphasise that the [memorandum] is not legally binding and the transactions under [it] may or may not proceed,' China Gas said.
A key part of the co-operation will see the formation of a joint venture to be owned 51 per cent by China Gas and 49 per cent by Temasek, which will provide gas management and services.
It is understood that Temasek planned to invest in China Gas' 600 million yuan gas project in Nanjing, which was signed last week.
