CNPC Hong Kong Ltd., a unit of the country’s biggest energy company, said it may spend as much as HK$10 billion ($1.2 billion) on gas projects this year as China encourages use of the cleaner-burning fuel.
The funds will be invested in the mainland, including constructing plants to liquefy natural gas, Finance Manager Patrick Lau said in a telephone interview today. CNPC Hong Kong has about half the cash it wants to invest and may raise additional funds through bonds or share sales, Lau said.
China wants to triple gas use to about 10 percent of its energy consumption by 2020 to reduce its reliance on more polluting coal. CNPC Hong Kong, which operates oilfields in China and overseas, is enlarging its gas business after PetroChina Co. took a majority stake in 2008.
“We really only entered the gas market last year and we want to expand,” said Lau. “If we don’t, others will.”
The company said on Nov. 30 it would raise as much as $488 million selling new shares in Hong Kong. Nothing has been decided on additional share sales yet, Lau said.
CNPC Hong Kong, which operates 11 oilfields in China, Kazakhstan, Thailand, Peru, Oman, Indonesia and Azerbaijan, expects half its income to come from gas within five years, Chairman Li Hualin said in May.
The oil producer rose more than four-fold in Hong Kong trading over the past year, mirroring gains by other Chinese gas suppliers including China Gas Holdings Ltd. CNPC Hong Kong advanced 3.3 percent to HK$9.48 today.
To contact the reporter on this story: John Duce in Hong Kong at Jduce1@bloomberg.net