PetroChina shares soar on natural gas price hike
Shares of PetroChina open up more than six per cent higher
Shares of China’s dominant oil and gas producer PetroChina soared on Tuesday after Beijing announced that it would raise natural gas prices for industrial and commercial users by 15 per cent as part of efforts to boost gas consumption.
Shares of PetroChina, which suffered huge losses last year from selling imported natural gas in the domestic market at a loss, opened up 6.4 per cent at HK$8.78 in Hong Kong.
Investment banks like Morgan Stanley and BNP Paribas upgraded their ratings on the stock in reaction to the hike announced late on Friday. The Hong Kong stock market was closed on Monday due to a public holiday.
China - the world’s largest energy user - said it would raise the price local distributors pay for gas for non-residential use by 15 per cent from July 10, as it strived to cut its reliance on dirty coal and raise the share of natural gas in its energy mix to 8 per cent by 2015, from 5 per cent now.
The hike would give PetroChina and other national energy giants like Sinopec and CNOOC Ltd more incentives to import natural gas - whose prices are linked to international crude oil prices - to meet surging local demand, analysts say.
Shares of Hong Kong-listed Chinese natural gas distributors like ENN Energy also rose sharply on Tuesday as investors expected the price hike to result in a jump in gas imports, boosting their sales volume, analysts say.