By Chen Aizhu
SINGAPORE (Reuters) – China’s Suntien Green Energy Co. Ltd (HK:), a wind power producer and piped gas distributor, plans to build a $1 billion liquefied (LNG) receiving terminal in north China by end-2022, after its investment plans won state approval, a company official said.
The little-known firm, backed by the Hebei provincial government, joins a handful of Chinese companies outside the dominant state energy giants aiming to own and operate a receiving facility for the super-chilled fuel, of which China is the world’s second-largest buyer.
In a Hong Kong exchange filing on Thursday, Suntien said the central government had approved its plan to build a gas terminal in the city of Tangshan with an eventual handling capacity of 12 million tonnes a year.
A Hongkong-based investor relations official told Reuters the company would initially invest 8.07 billion yuan ($1.15 billion) for a first-stage terminal able to handle 5 million tonnes of LNG a year by the end of 2022.
The project will include eight storage tanks, each sized 200,000 cubic meters, and a berth able to dock LNG tankers between 80,000 and 266,000 cubic meters, the official said.
Suntien, which has a market capitalization of HK$8.47 billion ($1.1 billion), said it plans to finance the Tangshan project through its own capital and loans from financial institutions.
The company began life in 2010 as a wind power generator, but wants to beef up its natural gas business to contribute half its profit in five years’ time, versus 30% in 2018, said the official, who declined to be named as she is not the company’s official spokesperson.
The move would compensate for a less prospective wind power business, which is facing headwinds from over-capacity and dwindling state subsidies, the official said.
“The outlook of wind power is less certain … because of lags in state subsidies and the limits on the amount of generation,” she said.
Its gas business, however, has been robust.
Suntien currently operates 4,140 km (2,575 miles) of pipelines in Hebei, China’s top steel-making province, and last year supplied the province with nearly 20% of its total gas needs, securing gas mostly from top gas producer PetroChina (HK:).
Gas demand in Hebei is forecast to hit 20 billion cubic meters in 2020, up more than 40% from 2018, thanks to a strong government push to switch from coal to gas to tackle pollution, the official said.
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.