Wang Chun (left), director of the State-Owned Assets Supervision and Administration Commission of the Dalian People's Government, and Liu Minghui, managing director of China Gas Holdings, shake hands after China Gas signed a 750 million yuan deal to supply clean fuel to Dalian. The company and the municipal government agreed yesterday to form a joint venture with a registered capital of one billion yuan. The Hong Kong investment is for a 75 per cent stake in the project while the mainland municipality will pay 250 million yuan for the remaining stake. The deal nearly doubles China Gas' customer base to 1.4 million, said Mr Liu. 'It is a profitable utility, otherwise we wouldn't have invested in it,' he said. The assets to be transferred into the planned joint venture are Dalian Gas's 650,000 residential users, 6,000 industrial and commercial users and a 1,330km gas pipeline network. Dalian, with a 6.5 million population has a high penetration rate of coal gas, consuming 300 million cubic metres of the fuel annually. A key part of the deal will be to convert coal gas into cleaner natural gas, Mr Liu said. China Gas chief financial officer Eric Leung said the company expected to increase the number of piped-gas projects to about 60 by the end of March next year from its current 50.