Liquified Petrolem Gas(LPG) is a gas liquified by compression, consisting of flammable hydrocarbons, as propane and butane, obtained as a by-product from the refining of petroleum. It is mainly used as a domestic fuel, especially in rual-areas, and also as an industrial and motor fuel.
Through acquisition and consolidation of Zhejiang Zhongyou Huadian Energy Co., Ltd., the largest LPG distribution company in the PRC, China Gas currently owns the largest and the only vertically integrated LPG business in the PRC, linking the procurement and import in the upstream, storage and distribution in the midstream and the retail and sales system in the downstream.
At present, the major LPG investments and constructions of the Group include four large petrochemical product storage and logistic bases in Xiaomen Island of Wenzhou, Nansha of Guangzhou, Jinjiang of Suzhou and Fangcheng Port of Guangxi. In addition, the Group has invested and constructed four 50,000-tonne grade and seven 2,000 to 5,000-tonne grade oil and gas terminal and storage facilities in the coastal areas and Yangtze River region including Guangxi, Guangdong, Fujian, Zhejiang and Jiangsu. It also possesses tens of Catagory 3 LPG storage stations and retail networks covering Wenzhou, Fuzhou, Xiamen, Shantou, Guangzhou, Fangcheng, Qinzhou, Jingjiang, Yancheng and Hanzhou (where some of the stations in Zhejiang, Jiangsu, Guangxi, Anhui, Hunan, Guangdong and Fujian are equipped with railway loading/unloading capabilities) and is rapidly expanding at a rate of more than 100 additional terminal wholesale and retail Catagory 3 stations each year. The Company also has eight LPG transportation vessels and hundreds of LPG special transportation vehicles in place and has initially established a comprehensive system for LPG product storage, sales as well as dangerous goods transportation, logistics and distribution.
Based on its strong marketing and research capabilities, China Gas has identifed its future LPG growth strategies and objectives. It has planned to achieve the "33315 Objectives" in fve years, i.e. to achieve an annual LPG sales volume of 3 million tonnes, to own 300 Category 3 LPG stations, to own 3,000 LPG terminal sales outlets and to achieve a sales amount of RMB15.0 billion.
China Gas' LPG business will be a strong and new driver of the Group's proftability in the future.