China Gas to benefit as coal to gas switch brings on millions of new users in northern areas

China Gas, one of the country’s largest natural gas distributors, expects its annual sales to reach 30 billion cubic metres in five years, thanks to the government’s effort to replace coal with natural gas consumption in northern China in a bid to improve air quality.

China Gas has targeted annual sales of 11 billion cubic metres for the financial year ended March 31, 2017.

Kevin Zhu Weiwei, vice president at China Gas, told reporters on Tuesday in Hong Kong that converting from coal to gas will add 40 million to 50 million natural gas users to the potential customer base in northern China.

The company is seeking to win 10 to 20 per cent of these users into its network and has been in talks with provincial government in northern regions.

Frank Li Yuntao, general manager of capital market at China Gas, said the company has raised its target for newly connected residential households from 2.2 million to 2.4 million for the financial year 2017, and expects 150,000 households of them to come from coal-to-gas projects.

It has also been in talks with officials in Beijing, Tianjin, Hebei, Henan, Shanxi and Shandong which plan to fully replace coal with cleaner energy in rural areas.