GCL Holdings, a private Chinese power company, is refocusing its business strategy towards natural gas, setting up import facilities and a trading operation, reported Reuters, citing company executives.
This pivot comes after the company divested its solar assets, selling 220 solar stations and raising approximately 23.5bn yuan ($3.25bn).
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It aligns with China’s growing demand for natural gas, and GCL is positioning itself to capitalise on this market expansion.
Last month, GCL’s Hong Kong-listed unit, GCL New Energy, appointed Xiong Xin, a former ENN Natural Gas vice president, to spearhead its gas trading division.
Xiong, who began his career in the liquified natural gas (LNG) sector with CNOOC, will also lead a new trading arm in Singapore.
According to GCL New Energy’s executive president Xu Huilin, the company plans to grow the Beijing team to around 20 by the end of the year, with the Singapore arm expected to have about five staff in the coming months.
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By GlobalDataGCL, which was once the largest privately-controlled solar power producer in China, ventured into the gas sector about ten years ago, including exploration in Ethiopia.
Despite ambitious plans in 2018 to invest in LNG receiving terminals, financial strains within its solar unit, exacerbated by overcapacity and reduced subsidies, impeded its gas projects.
However, after offloading its solar portfolio, GCL is now revitalising its gas ambitions, which include constructing two LNG terminals, international trading, and potentially resuming gas production in Ethiopia.
The company is developing an import terminal in Rudong, Jiangsu province, with a three million metric tonnes of annual capacity, at an estimated cost of 5bn yuan.
GCL holds a 51% stake in this project, with Pacific Energy owning the remainder.
Another terminal of similar capacity is planned for Maoming, Guangdong province, pending state approval.
GCL has more than two billion cubic metres of gas demand for its trading business because of its ownership shares in ten gas-fired power facilities in Guangdong and Jiangsu.
Additionally, it plans to sell gas to unaffiliated clients like city-gas companies and ceramics manufacturers.
