A high-performance source of clean energy, LNG is rapidly gaining in popularity worldwide, with LNG production growing at about 12% per year. LNG is commonly used in such industries as power generation, transportation, metallurgy, ceramics, and glassworks. In April, China Natural Gas announced plans to build LNG reserve stations, harbor LNG fueling stations (an untapped market in China), and inland LNG fueling stations in Hubei Province.
China Natural Gas is the first China-based natural gas company publicly traded in the United States. The Company operates 25 CNG fueling stations in Shaanxi Province and 12 CNG stations in Henan province. China Natural Gas also operates a network of natural gas pipelines serving residential, commercial, and industrial customers through its distribution networks in Shaanxi and Henan provinces. Natural gas offers an economical, more environmentally friendly alternative to coal and oil. The Chinese government, in an effort to reduce dependence on fossil fuels, aims to increase the country’s use of natural gas from 3% of total energy to 8% in 2010, and to 10% by 2020.
The Company is leveraging its strategic partnerships with China’s two largest oil and gas producers to widen its customer base. In addition to its natural gas supply contracts with PetroChina, the Company is partnered with State-owned China Natural Petroleum Corporation Kunlun Natural Gas Co. to bring one CNG compressor station and six fueling stations to Pingdingshan City in Henan Province. The project received construction approval from the Chinese government in March.
China Natural Gas expects to add 8 to 10 company-owned stations and four joint venture stations in 2010. Guidance for the full year 2010 projects an increase of 20 to 25% in revenue, along with an increase of 17% to 22% in net income. Due to the Company’s ambitious expansion plans and strong growth potential, investors would do well to watch China Natural Gas.
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