Greka China Green Dragon (Greka), a subsidiary of Green Dragon, is a vertically integrated supplier of natural gas from coal seams, commonly known as coal bed methane (CBM). Gas sourced from three projects in Shanxi, Jiangxi and Anhui provinces is distributed in the form of compressed natural gas (CNG) and to a lesser extent via pipeline. Greka currently has four stations operating in Henan province and 28 within niches in Henan and Shanxi provinces in various stages of construction.
According to a report by Proactive Investors the company is faced with what it calls China’s “seemingly bottomless thirst for [transport] fuel”. Extracts from the report follow:
- China is doing its utmost to exploit domestic unconventional fuel sources like CBM, to reduce oil-import dependency.
- The government is developing retail demand among end users by subsidising a new generation of bi-fuel cars that can run on CNG.
- As well as stimulating its end-markets the Chinese government is also subsidising Green Dragon directly.
Speaking about the government’s support, Randeep Grewal, Green Dragon’s founder and chairman said: “We are very fortunate that the Chinese central government has provided pragmatic financial incentives for businesses to succeed. What they’re essentially saying to us is: we know you’ve got it, we know you can get it out of the ground, now here’s a few more dollars, per thousand cubic feet, to get this industry going a lot faster.”
Grewal emphasised the number of cars coming on stream is massive, but there is insufficient gasoline or diesel. Hence the government is providing economical incentives to drive natural gas vehicles (NGVs).
He added: “Right now in China, you can buy a car and upgrade to a [bi-fuel vehicle] for about 4,500RMB, which is about US$250. This gives the owner an option rather than just depending on one type of fuel.”