China Natural Gas Announces Government Approval for Diversified Natural Gas Project
27 September 2007 - 3:00PM
PR Newswire (US)
-- Hosts Opening Ceremony in Shaanxi Province to Celebrate Future
LNG Plant -- NEW YORK, Sept. 27 /PRNewswire-FirstCall/ -- China
Natural Gas, Inc. (OTC:CHNG) (BULLETIN BOARD: CHNG) , one of the
leading providers of pipeline natural gas for industrial,
commercial and residential use and compressed natural gas (CNG) for
vehicular fuel in Xi'an, China, today announced that it received
government approval from the Shaanxi Province to pursue a
diversified natural gas project, which when completed will enable
China Natural Gas to produce various natural gas products,
including liquefied natural gas ("LNG"), liquefied petroleum gas,
dry ice, and sulfur. As part of the project, China Natural Gas
plans to complete an LNG processing and distribution facility in
Jingbian County, Shaanxi Province, in the first half of 2009. The
Company held an opening ceremony on September 20, 2007 to celebrate
the beginning of the project. The governor of Jingbian County in
the Shaanxi Province, representatives from the Development and
Reform Commission of the Shaanxi Province, representatives from the
Development and Reform Commission of the city of Xi'an, as well as
Company delegates and consultants from Chemtex Engineering Co. and
PetroChina, attended the opening ceremony and spoke in support of
the project. Mr. Qinan Ji, Chairman and CEO of China Natural Gas,
stated, "We are so pleased to successfully gain government approval
to pursue our diversified natural gas project, which when completed
will be the first LNG facility in the Shaanxi Province and we
believe will be the second largest in China. The approval process
for projects of this type is lengthy and arduous -- a factor which
we believe is a significant barrier to entry to potential
competitors and which better positions our company for long-term
growth. This project also allows us to diversify our business and
focus on two high-growth areas at once, our CNG filling station
business and the distribution and sale of other forms of natural
gas, like LNG. Overall, we believe that the PRC's clean energy
policies will bolster demand for natural gas in China and, with
today's announcement, we have government support to be a leader in
this exciting sector." Management is currently working with Chemtex
Engineering Co., one of the largest engineering consultants in the
world and which has proven experience in the engineering, design
and construction of similar projects in China. The Company
estimates the cost of phase one of the project, which includes the
design, engineering and construction of the LNG facility, to be
approximately $40.0 million. China Natural Gas expects to fund this
project with existing cashflow although the Company may also raise
funds through the public or private sale of debt or equity. Costs
and future revenue associated with the LNG project are not
currently part of the Company's existing financial guidance. The
Company continues to anticipate 70% revenue and net income growth
in 2008. About China Natural Gas, Inc. China Natural Gas, Inc.,
("CHNG"), is the first China-based natural gas company publicly
traded in the US. It currently owns and operates a 120 kilometer
long compressed natural gas pipeline in Xi'an, China, a fast
growing Chinese city supported by a population of approximately
eight million and is the "gateway" to the broad Western regions of
China. CHNG has three profitable business segments: end user
delivery of natural gas services to residential, commercial and
industrial customers; wholesale natural gas to retail natural gas
filling stations; and retail natural gas at company-owned natural
gas filling stations. The city of Xi'an has approximately 20,000
Taxis, 3,000 buses and 2,000 special purpose vehicles that are
powered by compressed natural gas. This press release may contain
forward-looking statements. These statements are based on the
current expectations or beliefs of China Natural Gas, Inc.
management and are subject to a number of factors and uncertainties
that could cause actual results to differ materially from those
described in the forward-looking statements, including the
fluctuation of natural gas prices, the availability of natural gas
supplies, changes in governmental regulations and/or economic
policies. DATASOURCE: China Natural Gas, Inc. CONTACT: China
Natural Gas Inc., +1-212-786-7372; or Ashley Ammon MacFarlane, or
Bill Zima, Investor Relations, both of Integrated Corporate
Relations, +1-203-682-8200; or In Asia, Xuyang Zhang of Integrated
Corporate Relations, Inc., +86 10 8523 3087
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