BEIJING (Reuters) - China Gas Holdings, one of China’s largest domestic natural gas distributors, expects sales to rise 30-45 percent this fiscal year and “sustainable high growth” the next few years due to Beijing’s clean air push, the company’s founder said.
China Gas, which counts South Korea’s SK Group and India’s GAIL among its investors, plans to expand its extensive pipeline network, and is in talks with potential partners on building its first receiving terminal for imported liquefied gas, Liu Minghui, the company’s founder and president, told Reuters in an interview last week.
Liu did not give the company’s outright gas sales volume for the financial year to end March 2018, but estimated his company makes up 8-9 percent of China’s total gas consumption.
China, the world’s third-biggest gas consumer, will burn 240 billion cubic meters (bcm) of the cleaner-burning fuel this year, up 15 percent versus 2016 in the nation’s fastest growth since 2011, according to consultancy SIA Energy. The growth in use is fueled by Beijing’s program to heat millions of homes with gas this winter in some 30 northern cities.
Liu, who set up China Gas in 2002 and holds the second-largest block of shares after state-run Beijing Enterprises Holdings, said the company plans to lay 20,000 to 30,000 km of pipeline every year over the next three to five years.
The company now operates some 140,000 km of natural gas pipeline, enough to go around the earth 3-1/2 times.
“As a leading firm in the gasification program this year ... at one point we had 50,000 workers laying pipes in Hebei alone,” said Liu, referring to the smoggy northern Chinese province that is the focal area for gasification.
Liu said this year’s program is only a start, as the National Development and Reform Commission (NDRC), China’s top economic planner, has started studying a more ambitious plan to use gas as the winter heating fuel in 14 northern provinces.
To meet surging demand for the fuel, China Gas, which has relied on state energy firms for gas supplies, last week agreed with Delfin Midstream to explore the possibility to import liquefied natural gas (LNG) from the United States.
With its pipeline grid reaching 400 cities, China Gas is planning to invest or build an LNG terminal in the country’s south, joining the ranks like privately-run ENN Energy Holdings and Xinjiang Guanghui to operate import terminals, which so far have been dominated by state energy giants.
Liu give no further details on the plan to explore building an LNG terminal.
Reporting by Chen Aizhu; Editing by Tom Hogue