China's desire to curb the country's production of air pollution and clean the environment will be beneficial to many of its gas distributors. China Gas Holdings Ltd, the country's biggest distributor by a number of networks, said China's reduced coal consumption plan will help boost earnings by 2020 to about five-fold over the current figures.
In early October, the Central Government announced an $818 million loot reward to entice its six most polluting regions: Beijing, Tianjin, Hebei Province, Shandong Province, Shanxi Province and the Inner Mongolia Autonomous Regions, to speed up in responding to the pressing environmental issues.
A flame burning natural gas is pictured at an oil refinery located on a branch of the Druzhba oil pipeline near Mozyr (Reuters)
The forced reduction in coal use of the central government will effectively push its residents to use alternative options, including natural gas.
Eric Leung, chief financial officer of China Gas Holdings, said the plan will enable the company to deliver at least 40 billion cubic meters of gas by 2020, from a forecast of 8 billion cubic meters in 2013.
"Those policies will greatly help our businesses, especially in expanding the number of our commercial and industrial users," Leung said. "We are very confident about the consumption growth as long as our upstream supplies can be guaranteed."
Just recently, China signed an agreement with the Government of Alberta, Canada that will increase the trade of energy between the two governments.
"The Chinese government is certainly pressuring the Chinese state-owned enterprises to reduce the amount of pollution that they're generating to secure sources of natural gas as soon as they possibly can," Ken Hughes, Alberta energy minister, told Global News.
Hughes, apart from Chinese officials, is likewise meeting officials in South Korea and Japan in a bid to expand and explore potential energy markets for Alberta.
Leung said China Gas, although has supply networks in 195 cities, has yet to make a profit from all networks. He stressed the company's projects are still mostly new. Some even have yet to begin their operations.
"We expect piped-gas sales to grow 25 percent every year over the next five years as more city projects mature. So I expect the number of profitable city projects to rise to 150 by 2015," he noted.
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