ZHONGHUA GAS (08246) has provided additional details on its disclosed investment in a high-pressure natural gas pipeline and LNG storage project in Tianjin, China.

The project, led by Tianjin Jin Re New Energy and budgeted at RMB397.00 million, broke ground in May 2026. Key milestones include completion of construction by October 2026, inspection and acceptance in November 2026, and commencement of commercial operations between March and June 2027.

ZHONGHUA GAS’s wholly owned subsidiary, LNG Sales, will contribute an “Investment Participation Amount” of RMB80.00 million, while the remaining construction cost will be funded by Tianjin Jin Re New Energy Group. Upon asset transfer and capital verification, LNG Sales is expected to hold approximately 20.2% of the project company’s equity, with Tianjin Jin Re New Energy retaining about 79.8%. The project company will be accounted for as an associate and not consolidated into ZHONGHUA GAS’s financial statements.

During construction, Tianjin Jin Re New Energy Group is responsible for all permits, licences and progress reporting. LNG Sales will maintain on-site oversight and enjoy a first right of refusal on future high-pressure pipeline projects developed by Tianjin Jin Re New Energy Group should agreed undertakings not be met by the March–June 2027 completion window. No interest will accrue on the RMB80.00 million contribution, which functions as a deposit to lock in equity on a cost-basis rather than at a higher post-completion valuation.

Tianjin Jin Re New Energy is ultimately owned 50% by Song Jie, 20% by Wang Changlu, 10% by Zhang Ze, 10% by Tianjin Jin Re Heat Supply Group, and 5% each by Li Ke and Li Qiang. The counterparty and all its shareholders are classified as independent third parties.

ZHONGHUA GAS’s board highlighted that Tianjin Jin Re New Energy Group holds controlling stakes in eight companies and indirect stakes in 12 others, with aggregate investments exceeding RMB100.00 million. Jin Re Heat Supply Group, a key shareholder, reported a net asset and cash position above RMB80.00 million and a current ratio over 1.0, underpinning its capacity to refund the participation amount if necessary.

The company reiterated that similar high-pressure gas pipeline opportunities are scarce in Tianjin, and the negotiated first-refusal right on future projects forms part of its regional market-development strategy. Management considers the transaction terms fair and in the interests of shareholders, and will re-comply with GEM Listing Rule requirements upon equity conversion or exercise of future participation rights.