CRG set to spend HK$5b to buy rival gas supply firms

China Resources Gas Group plans to spend HK$4 billion to HK$5 billion this year to acquire city-gas projects, and aims to double gas sales in five years.

CRG, the natural gas distribution arm of the government-backed conglomerate China Resources (Holdings), unveiled the plan yesterday after posting a rise in net profits for last year of 38 per cent, to HK$1.65 billion.

Revenue jumped 45 per cent to HK$19.6 billion, of which existing projects contributed 27 per cent and acquisitions 18 per cent. Gas sales grew 28 per cent, to 9.3 billion cubic metres, from 7.2 bcm in 2011.

CRG derived 80 per cent of its revenues from gas sales, and 20 per cent from fees it charged customers to connect them to the gas distribution network.

The company acquired 78 gas projects last year, of which 16 were bought from its parent firm, 28 from the United States-based utility firm AEI Energy and 34 from other parties. It currently has exclusive distribution concessions in 152 cities.

CRG's chief financial officer, Ken Ong Thiam Kin, said that after spending HK$8.5 billion on acquisitions last year, the company has budgeted HK$4 billion to HK$5 billion to buy more projects this year, plus HK$2 billion to HK$3 billion to expand its distribution infrastructure.