The JV will be effected through a newly incorporated entity, Liaoning Fortune New Energy Company (Fortune Liaoning).
Fortune Oil will buy 60% of the equity interest in the new entity for about £1.7m with 10% interest purchased by Shenyang Development for about £0.28m and 30% interest purchased by Able Limited for about £0.85m.
Additional funding required by Fortune Liaoning will be obtained via local banks or from Fortune Oil through shareholder loan(s).
The initial capital of £2.9m will be used to acquire/lease land use rights and construct three LNG re-fuelling stations which in turn will support 200 LNG public buses.
Shenyang Development owns and operates the buses and under this JV agreement, the buses will use the LNG re-fuelling stations operated by Fortune Liaoning for LNG supply.
Concurrently, Shenyang Development will secure additional agreements with other bus operating companies to exclusively use the LNG re-fuelling stations operated by Fortune Liaoning.
Shenyang Development will be responsible for providing an additional 2,000 buses to use LNG that will require construction of an additional 20 LNG re-fuelling stations.
The long term plan is to add 6,000 LNG buses supported by 60 LNG re-fuelling stations.
Fortune Oil is an independent energy company engaged in the investment and operations of oil and natural gas supply projects in China.
