Chinese Distributor Partners with Sinopec

China Gas Holdings and Sinopec have entered into a strategic agreement that will allow them to "fully leverage each other's advantages in resources and downstream markets," they said March 4. China Gas is a city gas distributor and marketer, while Sinopec is a major LNG importer and filling-station operator. 

Sinopec's LNG import facilities and China Gas' pipelines can be combined to mutual benefit, with downstream marketing and investment in refuelling infrastructure providing an outlet for Sinopec's imports. The two will also co-operate in liquid petroleum gas in a similar way.

They will also embark on a campaign of expansion, through takeovers of smaller rivals: a joint venture, to be controlled by China Gas, will be responsible for buying downstream gas companies and acquiring downstream gas project concession rights.

China Gas head Liu Ming Hui said the agreement with Sinopec "represents a major market breakthrough for the sustainable and rapid development for the group." It will accelerate the pace of  LNG imports to diversify supply sources while lowering gas purchase costs, which will enhance the group's ability to guarantee gas supply."

Last month, China Gas said, Beijing stressed "the promotion of gas to villages and support for the construction of safe and reliable village gas tank stations and microgrid gas supply system." China has set 2060 as the deadline for creating a net zero carbon economy, where eliminating coal is a priority.