China Minsheng Investment conducts research on the Qinghua coal-to-natural gas project in Xinjiang

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CMIC’s Investigation into the Qinghua Coal-to-Natural Gas Project in Xinjiang Author/Source: Date: 2016-06-14 Clicks: 2 On June 8, Chen Guogang, Vice President of China Minsheng Investment Co., Ltd., Cao Zhenling, Director of the Investment Decision-Making Office, Wang Jian, Deputy General Manager of CMIC New Energy Investment Co., Ltd., and Tao Ran, Chief Operating Officer of CMIC Huaheng Investment Co., Ltd., among other officials, visited the Xinjiang Group to investigate the coal-to-natural gas project. Huo Qinghua, Chairman of China Qinghua Energy Group, Vice Chairmen Zhu Wenjian and Liu Zirong, Meng Lingjiang, General Manager of Xinjiang Group, Lang Ying, Executive Deputy General Manager, and Li Wei, Deputy General Manager, among other leaders, accompanied the team throughout the inspection. The inspection team visited the open-pit coal mining site, the coal-to-natural gas production facility, as well as the Sula Palace Industrial Park for the comprehensive utilization of coal by different grades, in order to assess the operational conditions there. In June 2015, China Minsheng Investment invested in the Xinjiang Qinghua coal-to-gas project and is currently the second-largest shareholder. During the inspection of Xinjiang Qinghua Group, the two sides held in-depth discussions on coal-to-natural gas projects. At the symposium, General Manager Meng Lingjiang introduced the project’s construction process, operational status, team strengths, resource advantages, plans for the second phase, and future prospects. He also outlined the efforts and achievements made by the group in terms of cost reduction and efficiency improvement. At the discussion session, Chairman Huo Qinghua said that China Qinghua Group and CITIC Investment are one family, and they will work together to address and resolve existing problems. He also hoped that CITIC Investment would leverage its strengths in the financial sector to assist enterprises in dealing with current challenges, planning for the future, and continuing to carry out their tasks effectively in the new environment, under the new normal, and amid new circumstances. At the discussion session, Chen Guogang, Vice President of China Minsheng Investment Co., Ltd., Cao Zhenling, Director of the Investment Decision-making Office, and Wang Jian, Deputy General Manager of China Minsheng New Energy Investment Co., Ltd., asked in detail about the production and operation status of Project Phase 1. By analyzing the cost structure and relevant data of this phase, they explored in depth the main factors affecting costs such as coal powder, water, and electricity in Project Phase 2, as well as ways to reduce expenses. They recommended accurately calculating the production costs, financial costs, and debt-to-asset ratios for both Phase 1 and Phase 2, so as to have a clear understanding and to prepare thoroughly for future negotiations with CNPC regarding gas prices, the second round of partnerships, and the acquisition of new customers. During the discussion, the shareholder companies reached a high degree of consensus on the construction of the second-phase project, as well as the measures to reduce costs and increase efficiency and to optimize the structure of the first-phase project. The two sides also conducted in-depth discussions and analyses on international and domestic gas prices as well as market demand. Through this visit, the shareholder companies gained greater confidence in the prospects of the Xinjiang Qinghua coal-to-gas project, and their mutual friendship and understanding were strengthened. Both parties stated that they would be more open and honest with one another during periods of macroeconomic downturn, work together closely, and help ensure that the cooperative projects achieve economies of scale at an early stage, so as to become leaders in the global coal-to-gas industry.