Kunlun Energy to acquire more parent gas assets
Kunlun Energy Co, a Hong Kong-based oil producer and gas supplier said that it is to accelerate its business expansion and acquire more gas assets from its parent PetroChina.
The company is now free of any financial pressure and it will consider any promising acquisition opportunities, Kunlun Energy Chairman Li Hualin said after the extraordinary general meeting held Thursday.
“We will continue to purchase gas assets from the parent company and we will consider financing options based upon acquisition opportunities,” Li told media in Hong Kong.
He also said that Kunlun will boost its natural gas supply operations for automobiles in 2011.
Shares of Kunlun closed unchanged at HK$12.22 in Hong Kong trading Thursday. However, the company’s shares have climbed 18.18 percent this year on recent speculation about further acquisitions of assets from its parent.
Kunlun, formerly known as CNPC (Hong Kong) Ltd, is very likely to win the bid for parent PetroChina’s 60 percent stake in PetroChina Beijing Natural Gas Pipeline Co. PetroChina is selling the stake for 18.9 billion yuan via a bidding process under conditions that are specifically favorable to Kunlun Energy, reports said. The bidding process ends today.
In October, Kunlun Energy acquired a 75 percent stake in a liquefied natural gas business in Dalian from PetroChina for 2.01 billion yuan.
PetroChina’s moves to inject gas assets into the Hong Kong-listed unit are part of an apparent strategy to turn Kunlun Energy into the group’s gas flagship while its parent will focus on the oil businesses, said Louis Wong, director of Phillip Securities.
“Investors are optimistic on Kunlun because it is backed by PetroChina,” said Wong. “The natural gas business also shows great promise as the Central Government has committed itself to promoting the use of clean energies.”
Currently relying on coal for approximately 70 percent of its energy consumption, China expects its natural gas usage to account for 9 percent of the nation’s total energy mix by 2020, Zhang Hongtao, chief engineer at the Ministry of Land and Resources said in October.
The country’s natural gas consumption has seen an average annual growth of 16 percent in the past 10 years, said Zhang, but at present natural gas only accounts for 3.8 percent of total energy consumption.
In June, the Central Government increased the wholesale prices of natural gas by around 25 percent and reduced retail rates of refined oil products by about 3 percent.
The National Development and Reform Commission said the adjustment is to curb demand and better allocate resources as China’s natural gas price is significantly lower than that of other fuels.
Kunlun’s first-half profit to June 30 increased nearly fourfold compared with the previous period as net income rose to HK$1.25 billion from HK$316.3 million as crude oil prices made a comeback and sales of natural gas rose.
China Daily
(HK Edition 12/24/2010 page2)
http://www.chinadaily.com.cn/hkedition/2010-12/24/content_11748000.htm