Progress in Major Investment
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DATANG INTERNATIONAL POWER GENERATION CO. LTD
(a sino-foreign joint stock limited company incorporated in the People's Republic of China)
(Stock Code: 00991)
OVERSEAS REGULATORY ANNOUNCEMENT
AND
INSIDE INFORMATION ANNOUNCEMENT
AND
ANNOUNCEMENT ON PROGRESS IN MAJOR INVESTMENT
Special Notice:
The board of directors (the "Board") and all directors (the "Directors") of the Company warrant
that there are no false representations and misleading statements contained in, or material
omissions from, this announcement, and severally and jointly accept the responsibility for the
truthfulness, accuracy and completeness of the contents of this announcement.
This announcement is made by the Company pursuant to the Inside Information Provisions (as
defined under the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong
Limited (the "Listing Rules")), under Part XIVA of the Securities and Futures Ordinance
(Cap. 571, Laws of Hong Kong) and Rules 13.09(2)(a) and 13.10(B) of the Listing Rules.
Inner Mongolia Datang International Keshiketeng Qi coal-based natural gas and ancillary gas
transmission pipelines project (the "Keqi Coal-based Gas Project" or the "Project") was
approved by the National Development and Reform Commission (the "NDRC") on 20 August 2009,
being the first large-scale coal-based natural gas pilot project approved by the NDRC. Inner
Mongolia Datang International Keshiketeng Qi Coal-based Gas Company Limited (the "Keqi
Coal-based Gas Company"), a subsidiary of Datang Energy and Chemical Company Limited (the
"Energy and Chemical Company"), which is a wholly-owned subsidiary of Datang International
Power Generation Co., Ltd. (the "Company"), is responsible for the development and construction
of the Project. The Project will be constructed in three series, with an annual production
capacity of 4 billion cubic meters of natural gas. Currently, the Series 1 of the Keqi
Coal-based Gas Project has gone through all technological process, and has all ancillary
transmission pipelines connected; the Project is undergoing test-running and fine-tuning
processes and will commence production in the near future.
The coal-based natural gas produced by the Keqi Coal-based Gas Project will be supplied to
the Beijing market through the "Keshiketeng Qi ?Gubeikou Gas Transmission Pipeline - metering
station in Bakeshiying"; the related company of natural gas sales branch of PetroChina Company
Limited (the "PetroChina Natural Gas Sales Company" or the "Buyer") will receive the coal-based
gas from the metering station in Bakeshiying, Luanping County, Hebei Province through the
"Exclusive Natural Gas Pipeline of No.4 Shaanxi-Beijing Pipeline", and these will then be
transmitted to users in Beijing.
On 10 December 2013, Datang Energy and Chemical Marketing Company Limited (the "Energy and
Chemical Marketing Company" or the "Seller"), a wholly-owned subsidiary of the Company,
entered into the Coal-based Natural Gas Sale and Purchase Agreement (the "Agreement") with
PetroChina Natural Gas Sales Company, the major terms of which are as follows:
1. Term:
The Agreement shall become effective when it is duly signed by the authorised
representatives of both parties with their respective company seals affixed thereto,
and shall remain effective until 31 December 2043.
2. Supply Capacity:
As the Keqi Coal-based Gas Project is divided into three stages, namely the trial-run
period (120 days from the date of commencement of gas supply), the ramp-up period
(from the end of the trial-run period of "Project Series 1" to the end of the
trial-run period of "Project Series 3") and the stable peak production period (from
the end of ramp-up period to the expiry date the Agreement or the date of termination
prior to its expiration), the annual contractual amount of the Series 1 and 2 of the
ramp-up period are 1.2 billion cubic meters/year and 2.5 billion cubic meters/year
respectively, and that of the stable peak production period is 4.0 billion cubic meters/ year.
3. Pricing principles:
(1) The initial transaction price (the "contractual price") is RMB2.75 per cubic meter
(including 13% VAT).
(2) The contractual price is based on the coal-based natural gas with lower calorific value
of not lower than 8,000kCal/m3. If the lower calorific value of the coal-based natural
gas delivered by the Seller is lower than 8,000kCal/m3 on any day during the term of the
Agreement, the contractual price applied in the actual settlement shall be discounted
as follows:
Discounted contractual price = contractual price x (the average calorific value of
coal-based natural gas on that particular day/8,000).
(3) The abovementioned contractual price shall be valid for the period from the date of
entering into the Agreement to 31 December 2016. The contractual price applicable for
1 January 2017 and onwards can be adjusted according to pricing and market conditions.
(4) If the State requires or recommends natural gas to be measured in calorific value,
both parties agreed that the contractual price shall be calculated based on the calorific
value in accordance with the requirement of the State and the principles stated in the
Agreement.
Upon commencement of production, Keqi Coal-based Gas Project will further enhance the Company's
competitiveness and profitability, at the same time effectively relieving the supply pressure of
natural gas in Beijing, thereby contributing to the implementation of energy strategies of the
State, the development of Beijing and the "Blue Sky Campaign".
By Order of the Board
Zhou Gang
Secretary to the Board
Beijing, the PRC, 10 December 2013
As at the date of this announcement, the Directors of the Company are:
Chen Jinhang, Hu Shengmu, Cao Jingshan, Fang Qinghai, Zhou Gang, Li Gengsheng, Cao Xin,
Cai Shuwen, Liu Haixia, Guan Tiangang, Dong Heyi*, Ye Yansheng*, Li Hengyuan*, Zhao Jie*,
Jiang Guohua*
* Independent non-executive Directors