China LNG, Hanhai Form Joint Venture in China

China LNG Group December 12 said it's subsidiary, CLNG Investment, has entered into a joint venture agreement with Hanhai Energy Investment, a unit of Cnooc Gas and Power.

The joint venture company will build a cooperation platform for the domestic LNG supply chain, China LNG said. It will develop the LNG value chain through establishing and exploring LNG sales channels, shortening circulation links, improving distribution efficiency, and reducing operating costs. According to China LNG, the joint venture company will also establish an LNG logistic system based on LNG tank containers, changing the traditional method of supply, storage, transportation and sales of LNG and ensuring a stable supply to users.

“The directors are of the view that entering into the joint venture agreement provides valuable supports and arrangements for the Group to bring in Cnooc as a strategic investor that is conducive to achieving of the company’s goal of becoming one of the largest LNG energy suppliers in the LNG segmented market,” China LNG said.

The initial registered capital of the joint venture company is proposed to be yuan 200mn ($29mn). China LNG will own 51% stake in the joint venture while 49% interest will be held by Hanhai. The term of the joint venture agreement is 30 years.

China LNG is involved in point-to-point supply and wholesale of LNG, provision of LNG logistic services, sales of LNG vehicles, provision of finance leasing services for LNG vehicles, vessels and equipment in China.

Cnooc Gas and Power, a unit of state-owned Cnooc, is the largest natural gas supplier in China. Hanhai Energy is an investment platform for the implementation of LNG downstream business of Cnooc.