On 19 and 20 February 2009, Genesis Energy and Zhongde as a strategic partnership, entered into four independent letters of intent with the Municipal Governments of Zhumadian (駐馬店), Shangqiu (商丘), Xinyang (信陽) and Hebi (鶴壁) in Henan Province, China, on possible investments in building and operating waste incineration projects for electricity generation in these cities. The indicative total investment in each city is up to RMB500 million respectively.
With a population of 98.69 million, Henan is the most populous province of China. Hebi, Shangqiu, Xinyang and Zhumadian are all prefecture-level cities in the province. With expedited economic development, Henan’s nominal GDP reached RMB1.506 trillion in 2007, ranking fifth in the country. Fixed asset investment grew in a rapid pace to RMB801.0 billion in 2007. As a result, an enhanced industrial system comprising food, chemical, textile, construction material and electronic production components has been formed. Investments in urban and township infrastructure facilities amounts to RMB152.7 billion, resulting in a much strengthened investment environment, in particular in agriculture, water treatment, environmental protection, education and cultural sectors.
These letters of intent have established a platform for future cooperation between Genesis Energy, Zhongde and the four Municipal Governments. Under the letters of intent, the joint business development team of Genesis Energy and Zhongde will conduct feasibility study on these potential projects. Further negotiations on such possible investments will be undergoing in due course.
Mr. Terence S T Kong, Executive Director of Genesis Energy, explained: “We have been looking for further investment opportunities in the energy sector in order to broaden our business and maximize return to our shareholders. The Chinese government has reaffirmed its commitment to environmental protection and intends to place the growth of country’s industry sector on an energy and resource efficient path. As such, the possible investments will bring tremendous opportunities for the Group in developing sustainable energy. This will not only generate a balanced and stable business portfolio in the long term but also help enhance our future earnings base.”
ZhongDe Waste Technology is a leading provider of waste incinerators for the disposal of solid medical, municipal (mixed household refuse) and industrial (including hazardous) waste. Founded in 1996, ZhongDe Waste Technology has installed more than 180 waste incinerators in 13 provinces throughout China.
“We will capitalize on the respective expertise and extensive experience of Zhongde and ourselves to drive the development of this new clean energy business segment,” said Mr. Kong.
The Group currently operates oil and gas businesses in Utah and the Four Corners Area (of Colorado, New Mexico, Utah and Arizona) of the United States, as well as oil and gas fields in Xun Yi and Ganquan County in Shaanxi, the PRC. Further, upon completion of a recently announced agreement, the Group will hold investments in the operation of a waste incineration project for electricity generation in Datong City in Shanxi. The Group has also formed a strategic 50/50 joint venture with New Times Group Holdings Limited (HKEx: 166) to pursue other investment opportunities, including a possible joint venture oil and gas exploration project in Tasmania, Australia.
About Genesis Energy Issued by : Through :
Genesis Energy Holdings Limited (HKEx: 702) is an energy company with focus on oil and gas exploitation and operations. The Group is committed to building a diversified portfolio of oil and gas assets and operations with an aim to developing into one of the leading independent oil and gas businesses in Greater China. The Group currently operates oil and gas fields in the US and PRC.
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