Energy in China

"The Shanxi Province of China is a very fast-growing industrial area. At a macro level, the per capita and projected car ownership is expected to increase as the area expands. It is estimated that car ownership will increase from 13 vehicles per thousand people in 2006 to 28 cars per thousand people in 2010."
      ––Cai Yongjun, Chairman and Chief Executive Officer of Longwei Petroleum

China is fast becoming one of the world's largest consumers of energy, yet only 80% of its energy demands are being met. Rapid industrialization and modernization are increasing the demand for energy and creating a need for an expansion of existing infrastructure, more distribution networks and stable suppliers. China's need for energy is projected to grow by 60% by the year 2015 and 150% by the year 2020.

As China grows, it is attempting to become self-sufficient in terms of energy supply for both traditional energy sources, like oil and coal, and alternative energy supplies, like solar and wind. Remaining independent of foreign oil imports means that China will not be vulnerable to fluctuating prices on the oil market, nor the political ramifications of importing oil from politically unstable regions. As China, and by extension Longwei, continues to grow, more and more opportunities for profit will become available for foreign investors.

Shanxi Province: An Energy Center

China is currently the world's largest consumer of coal and derives 71% of its energy from this fossil fuel. Shanxi Province, where Longwei operates, is a mineral-rich region containing one-third of China's known coal deposits, making it an important energy center.

Business in Shanxi Province, including Taiyuan City (its capital) and Gujiao, largely center around mining, power generation, transportation and other heavy industries that require fuel and oil to operate. Because Shanxi has no oil fields or oil refineries, it provides a unique market space for fuel oil and petroleum products.

Shanxi Province is growing at 9% to 10% a year and is the third largest consumer of petroleum products in China. Currently, there are 4,692 gas stations servicing approximately four million cars in the province, providing Longwei with an abundant available target market for its products. In addition, Shanxi Province is a highly localized and specialty market, thus Longwei does not compete at the national level.

With its reliable distribution networks, strategically located storage facilities and exclusive rail system, Longwei is helping to fuel Shanxi's–and, ultimately, China's–growth.