Newbridge to invest up to $200m in China gas project

Private equity firm Newbridge Capital has signed an agreement to invest as much as $200 million in a liquefied natural gas project in Xinjiang, a north-western province of China.

Newbridge Capital, one of the first US private equity firms to invest in Asia, has signed an agreement with Xinjiang Guanghui Group to invest over $200 million in the development of a liquefied natural gas (LNG) project in northwest China.

Newbrige will initially invest $33.8 million for a 25.99 percent stake under Phase One of the project. However, the firm has an option to invest up to $200 million in return for a maximum of 67 percent of the project’s equity by the third and final phase of the project, according to a company official from Xinjiang Guanghui.

The investment is subject to the provincial government’s approval, which Xinjiang Guanghui said is likely to be forthcoming. Newbridge’s investment is also subject to central government approval, the official told PEO.

This investment targets what the Chinese government considers to be a strategic industry.

Warburg Pincus and IFC have previously shown interest to invest in the same project, estimated to cost $465 million, the official added.

Upon completion, the new plant will process and treat associated gases from the remote Tuha oil field in Xinjiang, and the liquefied gas will be transported for use in Shenzhen, in south-eastern China, according to China Daily.