One of the most hotly discussed topics at the China-Arab State Expo last week was energy.
So it was no surprise to see one of the most eye-catching stands was that of the Ningxia Hanas New Energy Group, which has recently been boosting its profile around the world.
Last year, Hanas put into operation its liquefied natural gas (LNG) plant in Yinchuan, the largest of its kind in China. The company’s main business is LNG production, gas-fired cogeneration projects for heating and power and urban gas networks.
“We see our LNG business as a core company strategy for Hanas in the coming years,” said Du Yanzhong, the chairman of Ningxia Hanas New Energy Group.
“We are always introducing new technology to help with producing LNG. Gas is a big part of our operations, and we can export this, but it is very difficult to exploit, because it is deep underground and other things. You need equipment and technology and you need investment.”
The plant, which is located 16km from Yinchuan, was established to help guarantee sustainable energy supplies in China’s western region while also promoting the development of the country’s new energy industry.
China is the world’s second-largest energy consumer and producer and LNG is a big issue in China right now. China is expected to have an annual natural gas consumption of 260 billion cubic metres by 2015, and Sanford C Bernstein & Co reckons the number of vehicles fuelled by LNG in China will rise 10-fold to 800,000 by 2020.
LNG, which is mainly methane, refers to natural gas that has been converted to liquid form for ease of storage or transport. Mr Du pointed proudly to a photograph of a large fleet of lorries the company uses to transport its LNG around the region.
Hanas was founded in 2010 and is still a small player but the Chinese market is very large and the need for better energy solutions, including renewables, will create plenty of opportunities for the company.
“We are working on wind power and solar power as part of our efforts to contribute to reducing pollution. The north-western part of China is full of natural gas, but is very remote and it has a fragile ecology, but we can exploit a large amount of gas here and our production is large,” said Mr Du.
The group is also building a large solar power plant. It plans to invest 2.25 billion yuan (Dh1.35bn) to build a solar farm with a goal of 92.5 megawatts.
“We are focused on solar as well and our plant is a model for the commercial operation of ISCC [integrated solar combined cycle] plants in China,” said Mr Du.
The project is expected to be finished next month and he said it would be Asia’s first ISCC station.
In early March, China announced goals of building 235 million kilowatts of power generation capacity from clean energy over the next five years in an effort to trim the country’s heavy reliance on fossil fuels. Five million kw of solar power capacity is expected to be created by 2015 with projects planned in remote regions such as Ningxia, Xinjiang, Inner Mongolia and Tibet.
The group has also bought hardware from Vestas, with the Danish wind-equipment manufacturer supplying 100MW of hardware for the Yanchi wind farm.
During a recent trip to United States, the group president and founder Ma Fuqiang said he expected China and the US would have more opportunities to work together in the LNG industry in the next 10 to 15 years, due to China’s increasing demand and the US’ supply ability and better prices.
Mr Ma said the structure of the global energy market was changing and that in the next 10 to 15 years, “we’ll likely see China and India consuming more natural gas, and that’s when the US will play an important role”.
During the trip, Hanas was looking for suitors to form a joint venture to develop LNG projects by the “end of this year”, with an investment value of about US$5bn.
“The possible largest clients for the US are in Asia and emerging markets,” Mr Ma told the China Daily, adding that US prices were more “appealing” than those of Russia, the Middle East or Australia.