China Gas and OOC to develop LPG market

Cooperation with OOC will enhance Shanghai Zhongyou Energy’s ability to integrate the LPG business aimed to enhance overall corporate value.

Leading PRC piped-gas operator China Gas Holdings Limited (“China Gas”) has entered into a joint-venture agreement with one of its major shareholders, Oman Oil Company S. A. O. C (“OOC”). According to the agreement, China Gas and OOC will form a joint venture (“JV”) company in which China Gas will hold 55% interest by directing all assets of Shanghai Zhongyou Energy toward the JV, and OOC will hold 45% interest through the injection of US$131,500,000 in cash, according to a China Gas report.

Shanghai Zhongyou Energy is founded by China Gas and is engaged in the LPG business. Its operation and management headquarters are located in Pudong New District, Shanghai. Shanghai Zhongyou Energy is one of the largest petrochemical enterprises in China that engages in trading, storage, sale, processing and logistics management of LPG. It has been ranked among the top three enterprises engaged in China’s LPG distribution industry in recent years.

Mr. Liu Ming Hui, Managing Director of China Gas, said, “Our cooperation with OOC will significantly enhance Shanghai Zhongyou Energy’s ability to integrate the LPG business, expand the scale of our downstream operations, establish a more comprehensive vertically-integrated industry chain, and thereby enhance overall corporate value. The complementary strengths of both parties, in terms of market access and resources, will also help to further improve the competitiveness of Shanghai Zhongyou Energy.”

Mr. Ahmed Al Wahaibi, CEO of Oman Oil Company S.A.O.C, said, “As the second largest LPG consumer in the world, China does not only possess a huge market, but also boasts enormous growth potential. Cooperation with Shanghai Zhongyou Energy will allow us to more actively participate in the development of the energy market in China.”