Baosteel invests in 3rd west-to-east gas pipeline project

Baoshan Iron and Steel Co Ltd (Baosteel), the nation's largest listed steelmaker, announced on Thursday that it will participate in the construction of the third west-to-east gas pipeline.

The Shanghai-listed steel mill said in a filing to the Shanghai Stock Exchange that the company will invest 8 billion yuan in the China National Petroleum Corporation's third west-to-east gas pipeline project that will transmit gas from central Asia to Fujian province.

The move is to further strengthen the strategic cooperation of upstream and downstream sectors, according to the announcement.

A joint venture registered with capital of 62.5 billion yuan will be set up for the gas pipeline project. Baosteel, as one of the investors in the project joint venture, will take up a 12.8 percent stake, and an investment arm under Baosteel's parent Baosteel Group will invest another 2 billion yuan in the joint venture for a 3.2 percent stake, the announcement said.

The third west-to-east gas pipeline project has a total investment of 116 billion yuan, and is expected to have all the investment return in about 12 and a half years (including the project construction period).

"Natural gas network as the nation's important energy infrastructure will have a stable capital flow and return," said Baosteel.

The 5,000-km-long gas pipeline project is expected to become operational in 2015 and will carry about 30 billion cubic meters of gas annually.