China Gas acquires Fortune Oil

Guess how much gain is expected from Fortune Oil.

China Gas announced that on 16 December 2012, that it acquires  share capital of Fortune Gas for a total consideration of US$400,000,000 (equivalent to approximately HK$3,120,000,000).

Eric Leung, Deputy Managing Director and Chief Financial Officer of China Gas, said,

“The Group has worked hard to seize every opportunity to expand its gas business in the past decade. The acquisition of the entire interest in Fortune Gas enables the Group to quickly secure 11 natural gas projects across the country, together with one long-distance pipeline project and 14 natural gas refueling stations.

Apart from natural gas projects, Fortune Gas is also involved in Compressed Natural Gas (CNG) and Liquefied Natural Gas (LNG) vehicles and vessels refuelling business which is another strategically important segment with huge growth potential, as well as an advanced coal bed methane exploration business. The LNG vessel business is particularly helpful in complementing the Group’s business portfolio.

Fortune Gas boasts an excellent upstream, midstream and downstream vertically integrated business chain for its three aforementioned major businesses. This, plus the prime locations of its projects in Beijing, Tianjin, Hebei, Shanxi, Shandong, Henan and Liaoning, is expected to generate enormous synergies with our existing gas projects, thereby further expanding the scale of our business. According to the acquisition agreement Fortune Gas’s net profit target in FY2013 and FY2014 should not be less than HK$200 million and HK$400 million respectively. We are confident of the quality of Fortune Gas’s project portfolio and believe that the acquisition would help enhance the Group’s overall profitability and generate greater returns for our shareholders.”