The Hong Kong and China Gas Company
|Traded as||SEHK: 0003,
OTC Pink: HOKCY
|Founded||Hong Kong (1862)|
|Headquarters||Quarry Bay, Hong Kong|
|Lee Shau Kee, Chairman
Alfred Chan, general manager
|Products||Gas supply, Potable water, Sewerage, Telecommunications|
|Revenue||HKD 9,351m (2006)|
Number of employees
|Footnotes / references
37.15% Associate of Henderson Land Development
The Hong Kong and China Gas Company Limited (Chinese: 香港中華煤氣有限公司), commonly known as Towngas, is the sole provider of towngas (from naphtha) in Hong Kong. Founded in 1862, it is one of the oldest listed companies in the territory.
It is the leading public utility in Hong Kong, and supplies towngas to 85% Hong Kong households, and also to commercial and industrial customers. It has several joint ventures in gas supply on the Mainland China, where it has also started to enter into the businesses of supply of drinking water and waste water disposal. It also engages in property development projects, namely International Finance Centre (15% share), Grand Promenade (50% share) and Grand Waterfront, in Hong Kong with its largest shareholder.
According to official documents, Henderson Land Development Co. Ltd (HLD) is the company's largest shareholder, owning 37.15% of the share capital of the company as at 31 December 2005. The shares are held through HLD's listed subsidiary, Henderson Investment. Lee Shau Kee, chairman of Henderson, is also the chairman of the company. Of the company's 10 directors, three others are also directors or vice-chairmen of Henderson.
In February 1862, the concession to supply gas to the city of Victoria (the centre of which now referred to as Central), was obtained from then governor Sir Hercules Robinson by William Glen, a newcomer to the gas industry. Incorporation took place on 31 May 1862 and by 3 December that year there were 15 miles (24 km) of pipes and 500 gas lamps along Queen's Road and Upper Valley Road. In Kowloon, residents continued to rely on candles and oil lamps until gas was laid on 28 years later. The company's original generating plant, the first in Asia, stood on the waterfront at West Point near Whitty StreetA[›] and provided gas for lighting to Jardine's offices, the The Hong Kong Dispensary and the Hong Kong Hotel. For 80 years the plant was coal fired and produced 120,000 cubic feet (3,400 m3) of gas per day. It was run directly from Britain until 1954 when a majority shareholding was purchased by local firm Wheelock and Marden Company Limited who moved the company's registered domicile from the UK to Hong Kong.
As of 2011, the only surviving four gas lamps installed by the company are situated at the top and bottom of a flight of broad granite steps linking Ice House Street and Duddell Street. These are still maintained by Towngas, while the site is one of the Declared monuments of Hong Kong.
Gas production and network
The company imports natural gas from Australia by sea and stores it at the Dapeng liquefied natural gas (LNG) terminal in Shenzhen under a 25-year contract. A 6.5 kilometre long submarine pipeline connects the Dapeng terminal to Towngas' Tai Po plant. The Tai Po plant produces 97% of town gas while the remaining 3% is produced at the Ma Tau Kok plant. The two plants cover 1.76 million of households via a network of more than 3,500 kilometres of pipelines throughout Hong Kong. In Hong Kong, town gas is produced from naphtha and natural gas. Its major components are hydrogen (49%), methane (28.5%), carbon dioxide (19.5%) and a small amount of carbon monoxide (3%) .
Usurpation by ultimate parent
On 3 October 2007, HLD proposed to pay market value only to gain control of Towngas. The 39.06 percent stake in Towngas held by subsidiary Henderson Investment was valued at HK$42.86 billion in cash and convertible notes for the purposes of the transaction. Minority shareholders of Henderson Investment, who together hold 30.73%, would receive 204.1 million Henderson Land shares and HK$1.19 billion in cash.
The offer was considered by analysts to be favourable to the Company, and shareholder activist David Webb criticised the deal saying Henderson was acquiring the stake on the cheap, without paying any control premium to minority shareholders of Henderson Investment. Webb further criticised the nature of the offer as a back-door privatisation of Henderson Investment, which would virtually be a shell company after the transfer of the stake.
On 7 November, Henderson sweetened the offer to appease minority shareholders by increasing the cash portion to HK$2.24 per share, who threatened to vote down the proposal. On 7 December 2007, Henderson secured shareholders' support for the usurpation.
- Towngas in 2008 agreed to a joint venture with Sunpec and Shaanxi Yanchang Petroleum to develop block 3113 in Madgascar with technical assistance from Yunnan Kaiyuan Oil and Gas. The venture was success leading to the discovery of light oil in November 2009. This block along with block 2104 have estimated oil reserves of 5.6 billion barrels and natural gas reserves of 66 billion cubic meters.
- Waters, Dan (1990). "Hongs Kong's Hongs with Long Histories and British Connections". Journal of the Royal Asiatic Society Hong Kong Branch 30: 247–256. ISSN 1991-7295. p. 221
- "Duddell Street Steps & Gas Lamps". Antiquities and Monuments Office, Government of Hong Kong. Retrieved 13 April 2011.
- "Tai Po Gas Production Plant". The Hong Kong and China Gas Company Limited. Retrieved 1 February 2014.
- "Towngas – Gas Production". The Hong Kong and China Gas Company Limited. Retrieved 1 February 2014.
- "Towngas – Network". The Hong Kong and China Gas Company Limited. Retrieved 1 February 2014.
- Cheung, Victor (4 October 2007). "Henderson makes $42.86b offer for Towngas control". The Standard (Hong Kong). Retrieved 4 October 2007.
- Victor Cheung, "Henderson Land all set to take over Towngas", The Standard, 9 November 2007
- Victor Cheung, Henderson Land gets control of Towngas, The Standard, 8 December 2007
- "10ANTANANARIVO72, Chinese Engagement in Madagascar and Comoros". Wikileaks.
- "Legislative Council Panel on Economic Services Gas Safety". Economic Development and Labour Bureau. 22 May 2006. Retrieved 12 April 2011.
^ A: Named after the plant's first manager, R.C. Whitty
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