Beijing Gas Blue Sky entered into Cooperation Agreements with China Sam and Sinoenergy Corp; To further tamp the Group�s whole LNG industry chain advantages

HONG KONG, CHINA�- Media OutReach - 2 September 2019 –
Beijing Gas Blue Sky Holdings Limited
(“the Company” or “Beijing Gas Blue Sky”, together with its subsidiaries, the
“Group”, HKSE stock code: 6828) is pleased to announce that, the Company
entered into cooperation framework agreements (the “Cooperation Agreements”)
with China Sam Enterprise Group Co.,
Ltd. (“China Sam”), a national high-tech enterprise, and Changchun Sinoenergy Corporation (“Sinoenergy
Corp”), a company listed on the Shanghai Stock Exchange.

 

DETAILS OF THE
COOPERATION AGREEMENTS

 

Cooperation with China Sam

 

The Company entered into a cooperation agreement
with China Sam to establish a comprehensive strategic cooperation in terms of,
among other things, (i) establishment of a close business relationship; (ii)
exploration of the opportunities on the Belt and Road Initiative; (iii)
establishment of fund for the merger and acquisition of companies in natural
gas industry; (iv) utilisation of the Chaozhou and Jiangyin liquefied natural
gas (“LNG”) receiving terminals invested by Sinoenergy Corp to secure low cost
and stable supply of LNG; and (v) collaboration on oil and gas exploration,
etc.

 

Founded in 1985 and headquartered in
Beijing, China Sam is a national high-tech enterprise. The businesses of China
Sam and its subsidiaries cover energy, chemical, investment, international
trade, film and security etc. Shenyu Chemical Oil & Gas Co., Ltd., an
indirectly-owned subsidiary of China Sam, became the actual controller of
Sinoenergy Corp in July 2019.

 

Cooperation with
Sinoenergy Corp

 

The Company also entered into a cooperation
agreement with Sinoenergy Corp to establish a comprehensive strategic
cooperation in terms of, among otherthings, (i) collaboration on energy
project; (ii) establishment of a close business relationship in relation to
logistic and trading of energy resource and LNG supply; and (iii) collaboration
on oil and gas exploration, etc.

 

Sinoenergy Corp is a company listed on the
Shanghai Stock Exchange (Stock code: 600856) and is principally engaged in the
production and sales of oil and natural gas, development, manufacture and sales
of natural gas storage and transportation equipment, mergers and acquisitions,
investment and operation of overseas oil and gas assets, and import
distribution of overseas natural gas and crude oil related products.

 

Sinoenergy Corp has two LNG receiving
terminals that are located in Yangtze River Delta economic belt and Pearl River
Delta economic belt respectively. The two receiving terminals are scheduled to
put into operation at the end of 2020 and it is expected that their processing
capacities each will increase to 2 million tons per year in 2025. In addition,
Sinoenergy Corp owns several oil and gas fields in North America with a total
of billions of barrels of geological reserves. In terms of natural gas
production and sales, Sinoenergy Corp has about 20 gas stations in Hubei and
Jiangsu with an annual sales volume of over 100 million cubic meters, and has
about 40 LNG industry direct supply projects in Zhejiang and Jiangsu with an
annual sales volume of over 600 million cubic meters. For the LNG plant in
Wuhan, it is expected to have a daily output volume of approximately 500,000
cubic meters after putting into operation.

 

BENEFITS OF
ENTERING INTO THE COOPERATION AGREEMENTS

 

In the upstream gas source procurement

 

The Company successfully participated in
the import and distribution of international LNG in 2018. By cooperating with
CNOOC Limited (“CNOOC”), the Company imported a shipment of LNG of
approximately 60,000 tons via CNOOC’s receiving terminals. Leveraging on the
Company’s advantage of established whole LNG industry chain, the project gained
good profit and was well received in the industry. Just seeing the Company’s
experience in international gas source procurement and domestic trade
distribution, China Sam and Sinoenergy Corp hope to maximize the development
value of the LNG resources they have already owned. Through this cooperation, the
Company will rely on a total of annual 4 million tons LNG loading and unloading
capacities (under full capacity) of Sinoenergy Corp’s Jiangyin receiving
terminal and Chaozhou receiving terminal in the Yangtze River Delta and the
Pearl River Delta economic belts to take advantage of the international
procurement resources and experience and gain greater bargaining power in international
gas sources, so as to improve the pricing power and industrial influence in
international procurement and domestic distribution.

 

In the midstream logistics channel

 

The Company itself has possessed the
scheduling capability of more than 200 LNG tankers, which operate across
Beijing-Tianjin-Hebei, Bohai Rim, the Yangtze River Delta and other regions. By
cooperating with China Sam and Sinoenergy Corp, the Company plays a protective
role in LNG shipment, logistics, distribution and external vehicle deployment
for its LNG receiving terminals, which ensures that the imported gas sources
are distributed downstream within the prescribed period while enhancing the
operational efficiency of the Company’s logistics vehicles and improving the profitability
of its logistics and wholesale trading business.

 

In downstream terminal distribution

 

The Company currently depends on multiple LNG project companies in
the Yangtze River Delta and the Pearl River Delta regions, and has
possessed various direct LNG supply projects for
industrial end users. This cooperation will not only offer more guarantees for
the winter gas supply of the Company’s terminal projects, but also help
the Company to further improve its capability to develop more
direct LNG supply projects with the enriching gas resource supply.

 

In supply chain finance

 

During the implementation process of this cooperation, there will be
a big demand for working capital as the business scale expands. The
Company will depend on its existing supply chain financing
capability, continuously broaden the financial cooperation with financial
institution supply
chain, improve the Company’s
supply chain financing capability as a core enterprise, and coordinate with
more domestic LNG operators to establish supply chain financial platform and
e-ommerce platform, improving the pricing power and the say in domestic LNG
industry while enhancing the Company’s profitability in supply chain
finance.

 

The entering into of the cooperation agreements was based on the
background of equity cooperation between China Sam and Sinoenergy Corp. In
order to effectively facilitate the acquisition and merger process and trigger more
synergies and effects of complementary advantages, China Sam introduced the Company
to participate in the cooperation and made full use of the Company’s operation
experiences and industry chain resources in the LNG business. Thus, the three
parties will leverage on their respective advantages, benefit mutually and
cooperate, jointly developing the natural gas market. Based on this
cooperation, the  Company may utilize
Sinoenergy Corp’s Chaozhou and Jiangyin LNG receiving terminals to secure
stable LNG supply at low cost, strengthen midstream distribution capability,
and enlarge the size of downstream end users, thus boosting the upstream and
downstream bargaining power and market share, improving the Group’s business profitability
and developing the cooperation space between the Company and Sinoenergy Corp in
the Mainland and Hong Kong capital markets.

 

Mr. Tommy Cheng,
Co-Chairman, CEO and Executive Director of the Group said that “This cooperation is in line
with national industry policy orientation on natural gas, and will improve the
profitability and industry competitiveness of the LNG industry chain which the
Company has deployed for the past three years. Meanwhile, it will alleviate the gas
supply tension in the Yangtze River Delta and Pearl River Delta, two major core
LNG consumption markets in China.”

About Beijing Gas Blue Sky Holdings Limited

Beijing Gas Blue Sky Holdings Limited (“Beijing Gas Blue Sky”, HKSE
stock code: 6828) is an integrated natural gas provider, distributor and
operator, with an emphasis on the midstream and downstream natural gas
development. Our natural gas business includes: (i) construction and operation
of compressed natural gas (“CNG”) and liquefied natural gas (“LNG”) refueling
stations for vehicles; (ii) construction of natural gas pipelines and operation
of city gas projects by providing piped gas; (iii) direct supply of LNG to
end-users; and (iv) trading and distribution of CNG and LNG.

 

The Group has adapted to the “One Belt One Road” policy, and focus on
operating and investing natural gas business. The Group is actively expanding
its business development and distribution, as well as continues to gradually
expanding the scale of operations. Currently, t he
Group’s natural gas projects covered 16 provinces, city and autonomous region
in the PRC, namely Liaoning, Jilin, Hubei, Hebei, Shandong, Anhui, Zhejiang,
Shaanxi, Guizhou, Hainan, Guangxi, Guangdong, Ningxia Autonomous Region,
Shanxi, Beijing City and Shanghai City. The Group is committed to its vision:
“develop clean energy, enhance customer value, create a beautiful blue
sky”. In the future, it will continue to actively investing and developing
natural gas business, as well as participating in the development of natural
gas industry value chain.