Hong Kong & China Gas to Invest in New Energy Sources

Hong Kong & China Gas Co., also known as Towngas, has set aside almost $1.29 billion to boost its distribution network and invest in new energy projects across China during the next two to three years. The company which is China’s biggest piped gas supplier by sales, plans to secure more energy sources as natural gas supplies remain tight, a senior executive told Wall Street Journal.

Managing Director Alfred Chan said that the company also hopes to list its unconventional energy arm ECO Environmental Investments Ltd. in the long run.

"We see the new energy business being our next earnings growth driver as natural gas consumption in China more than doubles on the back of the 12th five-year (growth) plan to 2015," Chan told Wall Street Journal.

Earnings from ECO--which has invested in unconventional energy resources such as coalbed methane and coal-mine-methane in China since 2008--will grow by 50% annually and account for 20%-25% of total profit by 2016, from less than 5% in 2011, he said.

Towngas also is optimistic about China’s shale gas sector and it has signed a profit-sharing contract with a foreign energy company, which Chan declined to name, to develop shale gas resources in southwest China's Chongqing province, the news report said.