China Natural Gas Solidifies Power Supply Agreement for Future LNG Plant
25 März 2009 - 9:01PM
PR Newswire (US)
Shaanxi Province Supports Company's LNG Initiative with Funding for
Electrical Station NEW YORK, March 25 /PRNewswire-FirstCall/ --
China Natural Gas, Inc. (OTC 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 has reached
a power supply agreement with the City government of Yulin City,
Shaanxi province and the government of Shaanxi province. Under this
agreement, Yulin Electric Power Supply Bureau, in support of the
Company's LNG initiative, will build an integrated 110KV electrical
substation to provide the power needs of the Company's LNG plant.
Yulin Electric Power Supply Bureau will provide the funding of
approximately RMB 26 million for the build-out. Mr. Qinan Ji,
Chairman and CEO of China Natural Gas commented, "We are delighted
to update investors with this positive news. The agreement has
provided us an additional cost savings of approximately RMB 26
million, further enhancing our financial flexibility. We believe
this further demonstrates the continuous support of local
governments for our company as well as the importance of our LNG
plant to the local economy. Currently the construction is
progressing according to schedule and the electrical substation,
along with the associated financial support from the government,
paves the way for the kickoff of our LNG operations in late 2009."
Mr. Ji continued, "We have received many positive responses from
several potential customers indicating their interest in our LNG
products. We are confident that our LNG plant facility will enable
us to capitalize on the growing demand for LNG in China and,
initially, we can distribute up to 500,000 cubic meters of natural
gas per day. Thus, we estimate that in this first phase, we should
drive incremental revenue of at least $10 million in 2009, and we
anticipate that our revenue from LNG will generate higher margin
than revenue from our other businesses such as residential delivery
of CNG and our CNG filing station business." About China Natural
Gas, Inc. China Natural Gas, Inc., ("CHNG"), is the first
China-based natural gas retailing company publicly traded in the
U.S. It currently owns and operates a network of CNG retail filling
stations as well as a 120 kilometer long compressed natural gas
pipeline in Xi'an, China. Xi'an is a fast growing Chinese city
supported by a population of 8.5 million and is the "gateway" to
the broad Western regions of China. CHNG currently retails natural
gas at company-owned filling stations, delivers natural gas
services to residential, commercial and industrial customers, and
converts gasoline-fueled vehicles to hybrid (natural gas/gasoline)
powered vehicles. Currently it is estimated that there are 5,000
buses and 20,000 taxis using CNG in Xi'an. 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 progress
of construction and development activities, fluctuation of natural
gas prices, the availability of natural gas supplies, changes in
governmental regulations and/or economic policies. CONTACT ICR,
Inc. Ashley Ammon (US) +1 203-682-8200 Wei-Jung Yang (China) +86
6599-7968 DATASOURCE: China Natural Gas, Inc. CONTACT: Ashley
Ammon, (US) +1-203-682-8200, ; or Wei-Jung Yang, (China)
+86-6599-7968, , both of ICR, Inc. Web Site:
http://www.naturalgaschina.com/
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