CKI and ITOCHU Form Hong
Kong/Japanese Consortium
to Bid for Guangdong LNG Project
2 February, 2000 -- Hong Kong
Cheung Kong Infrastructure Holdings Ltd. (CKI) announced today that it has signed an agreement with ITOCHU Corporation to form a consortium to tender for the Guangdong LNG Project, China's first LNG project scheduled to begin operation in 2005.
This strong CKI-ITOCHU consortium will be complemented by technical assistance provided by Tokyo Gas Engineering Co., Ltd., an affiliate company of Tokyo Gas Co., Ltd., the world's largest operator of LNG receiving terminals.The consortium is also closely related to CKI's 38% owned associate company, Hongkong Electric Holdings Ltd, who is a ready offtaker of the Guangdong LNG Project.
The Guangdong LNG Project is the first LNG receiving terminal project in China. The first phase of the Project will have a capacity of 3 million tonnes of LNG per annum with an estimated total investment of US$600 million. Shareholdings for the Sino-foreign joint venture among Chinese and foreign partners will be 65% and 35% respectively.
"We have had great interest in the Guangdong LNG Project since the project started to be unveiled over a year ago, and have carried out extensive studies on the Project. CKI is very happy about partnering with ITOCHU in the tendering of the Project. The CKI-ITOCHU consortium has all the necessary attributes which will greatly benefit the Project - capital and project financing capabilities, operational experience, technical expertise and even a ready customer," said Mr. H L Kam, Managing Director of CKI.
"The CKI-ITOCHU consortium tender will be a very competitive one. We believe the consortium could make meaningful contributions to the Project," said Mr. Kam.
"As of now, CKI has over HK$10 billion investments in the PRC. This natural gas project fits very well into CKI's energy portfolio. It is also a natural extension of our investment strategy in the Mainland," commented Mr. Kam.
"As part of our strategy to expand in our energy portfolio, we are currently studying a number of gas projects. We are also investigating the possibilities of introducing natural gas into the HKSAR to give Hong Kong residents the choice of this cheaper and greener energy," added Mr Kam.
CKI has been very active in the energy business recently. In addition to investing in Envestra, the gas distribution operation in Australia, CKI has just signed an AU$3.25 billion deal for ETSA Utilities, the South Australian electricity distribution operation last week. CKI has expanded its energy business from power generation to power distribution as well as into gas supply and distribution.
Additional Corporate Information for Reference
ITOCHU Corporation is Japan's first Sogo-Shosha, or Japanese trading house, which started its business prior to the normalization of Sino-Japanese diplomatic relations in 1972. At present, ITOCHU owns 240 joint ventures in China. Over the last three years ITOCHU has expressed keen interest in participating in the LNG project in China. ITOCHU's business turnover is the largest in China among the Japanese trading houses; it has extensive experience in conducting business in China.
CKI, a constituent stock of the Hang Seng Index (Ticker: 1038), is the largest diversified infrastructure company in terms of market capitalization in Hong Kong and is one of the largest investors in China's infrastructure sector. CKI's three core businesses are infrastructure materials, energy, and transportation. With strong financial position and extensive experience, CKI has ambitious globalization and diversification plans.
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