Xinao Gas, a Hong Kong-listed piped gas distributor in the mainland, has set up a $433 million piped-gas joint venture in Quanzhou, a city in the southeast of Fujian province, according to a statement to the stock exchange.
Xinao holds 60 per cent of Quanzhou Gas, while local utilities operator Quanzhou State-Owned has 32 per cent and construction company Quanzhou Zhongyuan the remaining 8 per cent.
The joint venture has an exclusive right to supply piped gas to Quanzhou for 29 years.
Xinao has not yet secured a gas supply agreement, but said the first phase of a 5.89 billion yuan liquefied natural gas facility, which will be able to hold 2.6 million tonnes of gas, was due to come on line in Fujian in early 2007.
China Gas, another Hong Kong-listed piped gas distributor, said last week it planned to nearly double its projects to more than 80 mainland cities over the next five years after securing a 20 billion yuan facility from China Development Bank.
But although gas distributors are confident of growing demand, analysts warn that mainland gas prices are not yet fully liberalised, and consumers are still reluctant to pay higher prices for piped gas.
