Hong Kong, April 18, 2000 - Cheung Kong Infrastructure Holdings Limited (CKI) announced today that it has signed a contract with Liaoning Petroleum Industrial Company Limited (Liaoning Petroleum), a subsidiary of Petro China, and Shenyang Transport Bureau's Shenyang Road Main Hub Group Company Limited (Shenyang Road) to form a cooperative joint venture to operate liquefied petroleum gas (LPG) business in Shenyang and other cities in the province of Liaoning.
CKI is the majority shareholder of the new joint venture, holding 51% interest while Liaoning Petroleum and Shenyang Road hold 25% and 24% interests respectively. The initial phase of the project will commence in Shenyang with a RMB25 million investment, comprising 4 LPG filling stations and a LPG vehicle conversion plant. The annual LPG filling capacity of the stations will be 12,000 tonnes and the conversion plant can handle 5,000 vehicles per annum. The joint venture owns a 30-year and a 7-year right to operate the filling stations and the conversion plant respectively.
The joint venture plans to expand the business beyond Shenyang to other cities in Liaoning with the construction of 50 LPG filling stations, two vehicle conversion plants as well as research and development center. Total investment amounts to RMB240 million.
Mr H L Kam, Group Managing Director of Cheung Kong Infrastructure Holdings Limited said, "We are delighted to participate in Liaoning's LPG industry and get in the act with the increasing popularity of LPG vehicle use. This investment is of great significance for it straddles the two core business areas of CKI, namely CKI Transportation and CKI Energy. At the same time, it is a milestone in CKI's environmental-related business development."
"The use of environmentally-friendly LPG vehicles are being widely promoted in different parts of China. The development and construction of LPG filling stations and conversion facilities for turning conventional gasoline vehicles into LPG vehicles are major efforts in the Mainland's environmental protection initiatives that help reduce air pollution. LPG vehicles will undoubtedly become a major transport means in the future. With strong belief that this represents a huge market and a unique business opportunity, CKI takes the pioneering step to take part in the LPG business of Liaoning, signifying further diversification within CKI's transport business."
"From an energy business perspective, the investment marks CKI's first move into the environmentally-friendly LPG business in China which ties in well with the Company's diversification strategy. Environmental management has always been an integral part of CKI's business and this belief has helped generate new business opportunities. Venturing into LPG business not merely represents a new business, it also demonstrates our full support to promote LPG vehicles that will help combat pollution," added Mr Kam.
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