To Co-develop High Potential Market in Yangtze River Delta region
Zhonghua Gas Holdings Limited (the "Company"; Stock Code: 8246) together with its subsidiaries (collective namely the "Zhonghua Gas") today announces that it has signed a Memorandum of Understanding ("MOU") with Shanghai Jiulian Group Co., Ltd (namely the "Shenergy Jiulian"), a wholly-owned subsidiary of Shenergy (Group) Co., Ltd. (collective namely the "Shenergy Group") on cooperation in area of Liquefied Natural Gas ("LNG").
Zhonghua Gas and Shenergy Jiulian cooperate to form a 60: 40 Joint Venture ("JV") to co-explore end users market in Yangtze River Delta region for maximizing the edges of LNG resources of Shenergy Jiulian while end users resources of Zhanghua Gas. The JV will be principally engaged in sale of LNG, sale of LPG, engineering of LNG pipeline, sale, installation, maintenance of LNG delivery equipment, technology development, consulting and transfer of heating system, technology development of new energy, etc.
Zhonghua Gas intends to integrate the gas supply business of its existing customer resources in the Yangtze River Delta, such as existing point-to-point supply of LNG, decentralized energy, direct supply of industrial LNG, vehicle and ship refueling etc., into the LNG sales channel and business of the JV, and constantly expand the business scope of the JV and improve the market share. It will also be responsible for obtaining the qualification, license, permits, and approval for the JV to be engaged in LNG storage, transportation, sales and other related businesses as soon as possible.
Shenergy Jiulian as the LNG supplier for the JV will guarantee the sufficiency and stability of LNG supply and give necessary supports for the respective businesses of the JV.
Zhonghua Gas is proud and thrilled to be partnering with Shenergy Jiulian to create the optimal synergy for developing and expanding the LNG business. Shenergy Jiulian is a subsidiary of Shenergy Group which is a Top 500 enterprises in the People's Republic of China ("PRC") and a member company of State-owned Assets Supervision and Administration Commission of Shanghai ("Shanghai SASAC"). Shenergy Group is an investor and contractor for Shanghai's major energy infrastructure as well as supplier for major energy including electricity and gas. It also constructs the "6+1" (West Gas Line 1, West Gas Line 2, Yangshan imported LGN, East Gas, Sichuan Gas, Jiangsu Rudong and fifth trench LNG emergency gas source) LNG multi-gas source protection system and builds a municipal gas business chain integrating with production and procurement, pipeline transportation, sale and supply of LNG. In 2018, the scale of its LNG operation reached 9 billion cubic meters, accounting for more than 90% of the market share in Shanghai.
For Zhonghua Gas, this cooperation on the one hand enables it to expand the scope of the LNG business, on the other hand enables it to secure the supply of LNG resources and to expand its business to the high potential market in the Yangtze River Delta region, and then to expand across the country as it planned.
In addition, Zhonghua Gas plans to build up strong relationships with new partners in order to cater future needs and foster further business opportunities. Zhonghua Gas will always continue to look for opportunities to venture into business relating to New Energy business in order to expand its business and market coverage and ultimately to build it into a leading diversified and integrated new energy service provider in the Greater China Region.
Shenergy (Group) Co., Ltd.
Shenergy (Group) Co., Ltd. is a wholly state-owned enterprise which is funded and supervised by the Shanghai SASAC. It is formerly known as Shenneng Electric Power Development Company, which was founded in 1987 and restricted as a group company in 1996 with registered capital of RMB 10 billion. It currently owns more than ten second-level wholly-owned and controlled subsidiaries including Shenergy Company Ltd. (SH 600642), Shanghai Gas Group and Orient Securities (SH600958). As at the end of 2018, the company ranked among the top 500 Chinese companies for 17 consecutive years. It is an investor and contractor for Shanghai's major energy infrastructure as well as supplier for major energy including electricity and gas. It also constructs so-called 6+1 (West Gas Line 1, West Gas Line 2, Yangshan imported LGN, East Gas, Sichuan Gas, Jiangsu Rudong and fifth trench LNG emergency gas source) LNG multi-gas source protection system and builds a municipal gas business chain integrating with production and procurement, pipeline transportation, sale and supply of LNG. In 2018, the scale of its LNG operation reached 9 billion cubic meters, accounting for more than 90% of the market share in Shanghai. Shenergy Group shoulders the responsibility of ensuring the energy security supply of Shanghai and promoting the adjustment and optimization of the city's energy structure. In recent years, it has promoted the development of clean energy and the expansion of the energy industry chain. It has been involved in new business areas such as wind power and solar power generation, natural gas power generation, decentralized energy supply, power plant energy conservation technology, energy trade, and new energy venture capital funds, and has actively implemented power plants. Desulfurization, denitrification and other initiatives have made positive contributions to low-carbon development and energy conservation and emission reduction in Shanghai.
Shanghai Jiulian Group Co., Ltd.
Shanghai Jiulian Group Co., Ltd. was formally established on January 18, 2000. It is a wholly-owned subsidiary of Shenergy (Group) Co., Ltd. It was formed by the merger of the former Shanghai Commodity Exchange, Shanghai Metal Exchange and Shanghai Grain and Oil Commodity Exchange. Its principal businesses include oil trading agents, futures brokerage, investment management, delivery warehouse management, spot commodity trading, information technology, and property management, etc. It closely links with the major business of Shenergy Group and adheres to the development direction of energy factor market construction, financial investment and commercial real estate business. At present, its business scope is investments, domestic trading (except national special regulations) and other related consulting services, information technology services as well as cargo import and export business.
Zhonghua Gas Holdings Limited
Zhonghua Gas Holdings Limited is principally engaged in provision of diversified and integrated new energy services including technological development, construction related and consultancy services in relation to heat supply and coal-to-natural gas conversion, supply of Liquefied Natural Gas, coupled with trading of new energy related industrial products. The Group is also engaged in the property investment business.
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