China's Datang, partners plan $2.7 bln coal gas JV

SHANGHAI, April 14 (Reuters) - China's Datang International Power Generation Co Ltd (0991.HK) (601991.SS), China's second-largest listed electricity producer, said it has agreed with three partners to set up an 18.78 billion yuan ($2.68 billion) coal-based gas project in Inner Mongolia.

The joint venture project, due for completion by 2012, will use coal from nearby Shengli to produce natural gas for shipment via pipeling to Beijing, Datang said in a statement late on Friday.

It will produce 4 billion cubic metres of natural gas and other by products annually and is part of a drive to develop clean energy sources.

Datang will provide 51 percent of the 100 million yuan in initial registered capital of the venture, Keqi Coal-based Gas Co.

Beijing Gas Group, a subsidiary of Beijing Enterprises Holdings Ltd (0392.HK), will provide 33 percent, China's state-owned CDC, Datang's largest shareholder, will provide 6 percent and Hong Kong fund company New Horizon Capital will provide 10 percent. ($1=7.006 Yuan) (Reporting by Edmund Klamann; Editing by Ken Wills)