Sino Energy to Acquire Stake in Chinese Gas Company

Sino Energy International Holdings Group has bought an indirect stake in Fujian Xinjie Natural Gas Company, which engages in storage, transportation and sales of natural gas and liquid petroleum gas in China.

Sino Energy December 28 said it has agreed to acquire Wealthy Fortress Investment Corporation through which it will come to own 16% interest in Fujian Xinjie. The company expects this acquisition to allow it to expand its energy-related business for driving future growth. Fujian Xinjie is owned 58% by a subsidiary of Kunlun Energy Company, 26% by Fujian Deqing Investment and 16% by Wealthy Fortress.

Sino Energy will pay HK$300mn (US$38.67mn) in cash for Wealthy Fortress’s 100% equity. After the acquisition is completed, Wealthy Fortress will become an indirect wholly-owned subsidiary of the Group and Fujian Xinjie will be 16% indirectly owned by Sino Energy.

“The acquisition gives the Group the opportunity to cooperate with Kunlun Energy Company, a subsidiary of PetroChina Company and a leading gas industry player in China, conducive to the expansion of its energy-related business,” Sino Energy said.

Fujian Xinjie operates nine gas stations and has signed a strategic cooperation agreement with a PetroChina branch company to cooperate in setting up 100 gas stations. The company will take part in sales and transportation of pipeline gas in Fujian targeting to sell 1.3bn m³ of gas in 2017. 

Shardul Sharma