Home / Business Review / Retail Natural Gas Sales Business

Retail Natural Gas Sales Business

In the face of the challenges brought by COVID-19 during the year, the Group adhered to government’s guidelines in pandemic prevention and control, at the same time ensured the safety of gas supply. Customer-orientation is the bedrock of the Group’s business activities, we further explored gas demand of existing customers and developed new customers, utilising our digitalised tools which collected and analysed customers’ energy consumption data, to give us more insights into their energy consumption characteristics and predict future demands. As such, the Group was able to customise sales package for users and drove the growth of their energy consumption.

During the year, natural gas supply was adequate, upstream natural gas city gate price was reduced. At the same time, the Group increased low-cost LNG import through our own long-term contracts and from spot market utilising controlling shareholder’s Zhoushan terminal, which effectively optimised the gas supply structure and reduced overall gas procurement cost during the year. We shared part of the cost saving with customers who were price-sensitive, effectively stimulated their gas consumption volume.

New Customers Development

Most of the Group’s projects are located in key areas of air pollution prevention and control, including Beijing, Tianjin, Hebei, Henan, Shandong, Jiangsu, Zhejiang, Guangdong and other provinces, where local governments strictly implement environmental protection policies. Leveraging on the opportunity of air pollution control battle, the Group has further explored business opportunity in the C/I market and actively promoted coal-fired boilers replacement and LPG-to-gas etc. for C/I users. At the same time, with the increasing number of manufacturing companies relocating to industrial parks, and our advantage of possessing many industrial parks concessions, the Group has developed a large number of new C/I customers.

During the year, a total of 28,367 new customers (gas appliances installed with daily designed capacity of 17,077,763 cubic meters) were developed. Among them, the installed daily designed capacity from “coal-to-gas conversion” was approximately 4,780,000 cubic meters, accounting for 28% of the newly developed C/I customers. The Group implements market-based pricing for C/I customers' installation fees, which was steady compared with the previous year. By the end of 2020, the Group has served a total of 177,128 C/I customers (gas appliances installed with daily designed capacity of 141,786,545 cubic meters).

China is sprinting toward a “moderately well-off society”, urbanisation rate has exceeded 60% in 2020. Government’s urbanisation rate target is to reach 65% within the “14th Five-Year Plan” period, in this context, the utilisation of clean energy is essential to improve the environment as well as to meet the demand arising from people's pursuit of quality life, which will also provide the Group with enormous opportunities of developing urban residential customers. The Group will continue to focus on new customers development in urban areas, and enhance gas pipeline infrastructure establishment, so as to further raise the penetration rate of our projects. As a good corporate citizen, the Group will also assist local governments in achieving the replacement of scattered coals for the prevention and control of air pollution, focusing on areas in proximity to our existing concessions, to carry out “rural coal-to-gas project” prudently.

During the year, the Group developed a total of 2,293,000 residential households, in which new buildings, existing buildings and “rural coal-to-gas” conversion accounted for 74%, 5% and 21% respectively. The average construction and installation fee was RMB2,492 per household, maintaining at a stable level over the past few years. As of the 31 December 2020, the Group has developed 23.21 million residential customers cumulatively, raising the average piped gas penetration rate from 60.4% in 2019 to 62.0%.