Towngas China, the supply flagship of Hong Kong and China Gas, is close to signing new projects on the mainland as part of its HK$2.5 billion investment planned for this year. Chairman Alfred Chan Wing-kin yesterday said about HK$1 billion would be used to buy rights for about eight projects that would supply piped gas in provinces where it had no presence, while the other HK$1.5 billion would go into existing projects. The new projects would be in Hunan, Guangxi, Yunnan and Guizhou, where there are sufficient gas supplies and substantial industrial and commercial users, he said. 'Industrial and commercial customers will fuel our growth in the next three years,' Chan said after the company's annual general meeting. 'We will access new regions through new projects.' He also said Towngas China had sufficient funds to meet capital expenditure, with HK$1.4 billion cash on hand and a net debt-to-equity ratio of 17.3 per cent as of the end of last year. The company's portfolio of 65 piped gas projects would be expanded to 73 by the end of this year. Towngas China chief executive Peter Wong Wai-yee said the group had 'a 99 per cent chance' of buying a 70 per cent stake in a piped gas project in Miluojiang, Hunan, for roughly HK$150 million. Wong said the Miluojiang project had only seven industrial users, but they consume so much gas that it would be profitable to expand further in the city. Chan said the proportion of residential customers of Towngas would dwindle further to about 20 per cent in three years from last year's 27 per cent and 28 per cent in 2009. Residential customers consume far less gas than industrial and commercial users despite the much higher number of users in the residential sector.