SEOUL, KOREA - SK Group's forays into China's energy market are finally paying off.

 

 

According to industry sources on January 26, SK E&S, an SK Group company engaged in district heating and cooling, LNG-fueled electricity generation, LNG import, and LNG wholesale businesses, has benefited mightily from an equity investment in China Gas Holdings that saw its share price rise 86.8 percent last year.

 

Thanks to the soaring stock price, the market value of SK E&S holdings of 16.6 percent has increased over 1 trillion won. Forbes magazine said in a recent issue, "The Chinese government is actively encouraging the use of natural gas as a way to mitigate greenhouse gas emissions and the biggest beneficiary of this policy has been China Gas Holdings."

 

SK E&S began investing in China Gas in 2008 when it purchased a 16.6-percent stake in the company at 363.7 billion won. At the time China Gas remained at No. 4 in the retail gas market. Owing to the strategic support from the Korean company, China Gas has since become the largest supplier of gas to retail customers.

 

Based on the success with China Gas, SK E&S plans to expand its business in China. For example, Wuhan SK E&S-SINO Gas Holdings, the joint venture in which SK E&S took a 49-percent stake in 2007, is currently supplying gas to retail customers in Hubei Province through its 16 subsidiaries. The company is rapidly expanding and an SK E&S official said, "We are working day and night to make Wuhan SK another SK E&S in response to the rising demand in the region."