Towngas China plans expansion
Towngas China, formerly Panva Gas Holdings, plans to add four gas projects to its 51-strong portfolio this year in a bid to gain a bigger slice of the country's booming energy market, according to its chairman.
Alfred Chan Wing-kin said the gas supplier, in which Hong Kong and China Gas (Towngas) bought a 45 per cent stake in February, was in investment talks on 15 projects, with 'some' of them close to being finalised.
The new projects involved supplying piped gas and liquefied petroleum gas in small to medium-sized cities in northeastern and central China, he said.
Towngas, which runs 25 mainland piped-gas projects excluding Towngas China's, would expand in tandem with the associate company, said Mr Chan, also Towngas' managing director.
'The mainland market is so massive that each of them will look for acquisitions in regions where they already have presence,' he said after Towngas China's annual shareholder meeting.
Towngas would focus on projects in upstream gas exploration and mid-stream gas pipeline transmission networks. It would also consider supplying piped gas to end users in first-tier cities in fast-growing coastal regions in the east and south of the country. Loss-making Towngas China, whose expansion plan was curbed in the past two years by limited cash resources, would expand into smaller cities in existing markets in Heilongjiang, Liaoning and Sichuan, Mr Chan said.
John Ho Hon-ming, Towngas China executive director and Towngas chief financial officer, said the investment returns on Towngas China's new projects would vary between 13 per cent and 16 per cent.
Mr Chan said funding for the new projects would partly come from recent fund-raising exercises such as a HK$195 million shareholder loan from Towngas and a HK$703.49 million rights share issue.
Towngas China would return to profitability this year with 20 per cent growth in gas sales, he said. It lost HK$256.33 million last year.