Stocks News
- LNG deal falls through
Date: 13-Jul-2007 Sources: (Xinhua Online)
BEIJING, July 12 -- Newbridge Capital Ltd, a United States buyout firm, will sell a 25-percent stake in Xinjiang Guanghui LNG Development after the Chinese gas distributor failed to secure supplies for a liquefied natural gas project.
Xinjiang Guanghui LNG failed to sign a supply contract with China National Petroleum Corp by November 2006 for a proposed LNG project, Wang Yuqin, the head of securities department at the company's parent, told Bloomberg News on Tuesday.
Parent Xinjiang Guanghui Industry Investment Group Co, will buy back the stake for US$46 million from Newbridge, she said.
The lack of supplies will delay the Chinese company's plan to expand an LNG plant in west China's Xinjiang Uygur Autonomous Region, where gas is transported to cities in the east by trucks and trains.
Bigger rival China National Petroleum is supplying gas from Xinjiang to the east through the West-East pipeline. China National Offshore Oil Corp, China's third-biggest oil group, imports LNG into the east coast via its Guangdong terminal.
'Transporting LNG by road and rail is extremely expensive, and I don't see how it makes commercial sense when customers have access to the Guangdong LNG terminal and the west-east pipeline,' said Tony Regan, a consultant with Nexant Inc in Singapore.
'The smaller projects preceded the Guangdong project and lost their market after the terminal started,' said Regan, who earlier worked with Royal Dutch Shell Plc in LNG projects.
The Asian unit of TPG Inc, which manages more than US$30 billion in funds, bought the stake in Xinjiang Guanghui LNG for US$33.8 million last year.
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