Phoenitron Holdings Limited, through its subsidiary Shanghai Phoenitron Petroleum & Chemical Company Limited, has signed a Letter of Intent with Jiangsu Huagang Gas Company Limited, a company indirectly controlled by Kunlun Energy Company Limited, for collaboration in certain areas in the Yangtze River Delta economic zone in China.
The cooperation includes the supply of liquefied natural gas (LNG), capital, professional techniques and the promotion of relations with local governments and customers.
Terms of agreement
The Letter of Intent is to be valid for a term of three years. According to the Letter of Intent, it has been agreed that:
- Jiangsu Huagang is to leverage its advantages over its stable source of LNG from PetroChina, as well as its own capital resources and technical expertise.
- Shanghai Phoenitron is to utilise its established network with local governmental authorities and major customers. Both parties are to cooperate in the development and the establishment of LNG gas stations and the direct supply of LNG to industrial users in the Yangtze River Delta economic zone.
- Jiangsu Huagang is to ensure a stable supply of LNG to Shanghai Phoenitron's development projects, and Shanghai Phoenitron is to be responsible for the local LNG market development and project management and operation.
- The sourcing of LNG supply for the projects conducted by Shanghai Phoenitron is to be coordinated by Jiangsu Huagang. Individual supply contracts are to be entered into between Jiangsu Huagang and Shanghai Phoenitron for each development project.
- Jiangsu Huagang can provide gas station facilities and technical staff, and is to offer LNG at a discounted price to Shanghai Phoenitron.
Commenting on the agreement, Ms. Lily Wu, Chairman and CEO of Phoenitron Holdings, said: "The combined expertise and advantages of the Group and Jiangsu Huagang create a mutually beneficial situation for both parties. The strategic alliance can also make a significant contribution to the promotion of steady and sustainable provision of clean energy in the Yangtze River Delta economic zone, as well as the development of green energy in China. The Group has continued to explore business opportunities.
“In addition to diversifying its business, it is also striving to develop new markets with strong potential with a focus on China's new energy sector. Therefore, we will advance towards our strategic goal, i.e., for Shanghai Phoenitron to develop more than 50 LNG projects in the Yangtze River Delta economic zone in China by 2019. Along with the expansion of the natural gas business, this partnership is expected to generate additional income for the Group, consolidate its income base and generate more stable returns for our shareholders."
Adapted from press release by Katie Woodward
Read the article online at: https://www.lngindustry.com/liquid-natural-gas/29102014/phoenitron-kunlun-energy-to-tap-into-yangtze-lng-market-1689/