CGNC to Invest $600 Million for LNG Project in Inner Mongolia

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Researched by Industrial Info Resources (Sugar Land, Texas)--China Natural Gas Company Limited (CGNC) (Chengdu, Sichuan), a subsidiary of CNPC (Hong Kong) Limited (HKG:0135), and the government of Wuhai City agreed to the Cooperative Agreement Regarding Coking Furnace Gas Energy Conservation and Emission Reduction, as well as the Comprehensive Utilization Project, at a signing ceremony in Hohhot, the capital city of the Inner Mongolia region, on January 19, 2010.

As reported, CGNC and Wuhai City signed a letter of intent on November 8, 2009 regarding the introduction of CGNC for comprehensive utilization of coke-furnace gas in industry-concentrated areas such as the Qianlishan Industry Park and the Xilaifeng Industry Park; the construction of coking gas-based liquefied natural gas (LNG) plants; and coal tar deep-processing projects in Chengdu. Based on the letter of intent, both parties signed the Cooperative Agreement.

According to the Cooperative Agreement, CGNC will invest $600 million for the construction of two 100,000 cubic-meter-per-hour, coking gas-based LNG plants in Wuhai City, with an approximately 300-kilometer gas pipeline from Wuhai to Yinchuan, the capital city of the Ningxia region. The project will use coke furnace gas and high-temperature coal tar as raw materials. Upon completion, the project could produce 1.285 billion cubic meters of LNG products, 51,500 metric tons of naphtha, 245,000 metric tons of light fuel, and 100,000 metric tons of bitumen by utilizing 3.2 billion cubic meters of coking gas in a year.

CGNC is a hi-tech enterprise established in 1994, headquartered in Chengdu Economic and Technology Development Zone. The company is mainly engaged in oil and natural gas exploitation, natural gas utilization, and the manufacture of related equipments. CNPC Hongkong owns 51.01% of its shares, and plans to increase its share to 77.59% by the end of next month.

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