(Chinadaily)Natural gas supplier Tianjin Tianlian Public Utilities will receive a 3-billion-yuan asset injection from its parent firm, Tianjin Gas Group, in the coming three to five years.
The Growth Enterprise Market-listed Tianlian Public Utilities will also seek to be switched to the mainboard this year to enhance its profile, an executive said.
The assets to be injected include Tianjin Gas Group's natural gas business in Binhai New Area, an industrial zone that Tianjin government is using to attract multinational firms, Sun Boquan, chairman of both Tianlian Public Utilities and Tianjin Gas Group, told China Daily.
The deal is scheduled to be completed this year, and that will help boost Tianlian Public Utilities' annual production capacity four times to 50 million cubic meters this year, he said.
It will also help the firm to extend its services to 50,000 to 70,000 more households, reaching 190,000 in 2008.
Tianjin Gas Group is the largest natural gas runner in North China's Tianjin Municipality, which serves 1.8 million households with a 95 percent market share.
Tianjin Gas Group has increased its stake in Tianlian to 26.5 percent over the past three years.
However, compared to other national players like China Gas and XinAo Gas, Tianlian Public Utilities business was single-city focused. China Gas and XinAo Gas own 63 and 66 city piped gas projects nationwide, with connectable households of 12 million and 13 million, respectively.
Sun said Tianlian Public Utilities will certainly tap other markets in future but did not give a timetable.
"The scale of our business substantially lags behind other counterparts. We will head into other cities, but it has to be carried out step by step. Consolidating our business in Tianjin comes to the top of our agenda," he said.
In recent years, the central government has taken measures to rein in coal consumption and increase the usage of natural gas in the wake of worsening pollution. It aims to push up the consumption of natural gas to 8 percent of the total energy usage by 2010 from 5 percent in 2005.
Tianlian recorded HK$30 million net profit for the first nine months in 2007, increasing fivefold, while turnover rose 1.8 times to HK$97 million.
A Deutsche Bank report, which said natural gas consumption saw a 19 percent annual growth from 2002 to 2006, predicted the mainland's natural gas industry would remain prospective.