Merger of three Shanghai gas firms by year end: industry insiders

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Last updated at: (Beijing Time) Thursday, December 18, 2003

Merger of three Shanghai gas firms by year end: industry insiders

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Shanghai's three major gas distributors, which are controlled by Shanghai Municipal Engineering Administration Bureau, will be merged into a major gas group before the end of the year, said industry insiders.

The move is a result of the city's decision to reform its gas industry by withdrawing from the business of running it, said a senior official with the bureau.

Two of the three gas firms to be merged, Shanghai Pudong Gas Co Ltd and North Shanghai Gas Ltd, are owned by a government-owned entity.

The third firm, Shanghai Dazhong Gas Co Ltd, is a 50-50 joint venture between the government-owned company and locally-listed Shanghai Dazhong Public Utilities (Group) Co Ltd.

The three firms are providing gas to 3.37 million users in the city.

Final preparation for the merger is almost complete.

"We are currently running our business as usual and waiting for the city government's final decision to announce the reform plan," said an unidentified executive with Shanghai Pudong Gas Co Ltd.

Under the plan, private and foreign investors, including those from other industries, will be allowed to invest in the planned gas group, said industry insiders.

Shenergy Co Ltd, the city's major energy company, may control 60 percent of the stakes in the new group, reported Oriental Morning Post.

"The reform is expected before the end of the year and other companies in the gas industry, such as those in the upstream sector, might also join the new group," said the unnamed executive.

The city will also have a new source of natural gas from the West-East Gas Pipeline Project, which is managed by the China National Petroleum Corp, from January when it is piped to households and businesses.

(Shanghai Daily news)

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