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Friday, August 18, 2017, 23:02
Green switch to gas boosts producers
By Evelyn Yu
Friday, August 18, 2017, 23:02 By Evelyn Yu

This undated photo shows workers at a natural gas production plant in Puyang, Henan province. (Tong Jiang / China Daily)

Leading Chinese mainland gas distributor China Resources Gas Group said the country’s “coal to gas conversion” serves as key driving force in the sector. 

Shi Shanbo, chief executive of China Resources Gas, quoted a document released by the National Development and Reform Commission last month which said the government aimed to increase the proportion of natural gas in primary energy consumption to 10 percent by 2020 and 15 percent by 2030. 

The number is less than 6 percent at present, far from the global average of 24 percent, Shi added, saying the great gap has given gas providers large space for growth. 

China Resources Gas, a subsidiary of state-owned conglomerate China Resources, said it recorded a net profit of HK$2.11 billion in the first half of this year, an 8 percent increase from the same period last year. Gross gas volume rose 22 percent to 10.071 million cubic meters in the first six months. 

Shi said demand for gas strengthened as the government sought to protect the environment. “For the past two years, the gas volume consumption growth is single digit, in the first half this year the consumption has been up by 15.2 percent,” he said. 

The global Liquefied natural gas (LNG) price will be low, Shi noted, while domestic production volume would ramp up. He thinks the supply is sufficient to meet demand. 

Qatar and Australia respectively supply 35 percent and 20 percent of mainland’s LNG imports, figures from Forbes show. 

The company recorded a non-recurring loss on foreign exchange of HK$67.96 million in this period. Ken Ong, chief financial officer of China Resources Gas, explained that under the continuous depreciation of the yuan last year, the company was thinking about transferring as much as 50 percent of its Hong Kong dollar and US dollar loans to yuan, which caused the exchange-rate losses. Currently the percentage is 30 percent and the company plans to lower the proportion further amid the strong appreciation momentum of the yuan this year. 

The board recommended an interim dividend of 15 HK cents per share, the same as for the first half of last year.

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