FTO.L Share News (FTO)

China-focused energy company Fortune Oil has signed up to a joint venture agreement that will supply LNG to up to 6,000 buses in Liaoning Province in China. It will take time to build up to that level and the initial investment will be in three fuelling stations, which will supply 200 buses. The joint venture is with Zhonglian Enterprise Development Co, which has strong relationships with the government of Liaoning Province and operates buses, and Able Field International Ltd. The LNG will be supplied through stations operated by the joint venture, Fortune Liaoning.This could be a first step towards supplying LNG to other public vehicles in the province as well as supplying LNG to other provinces in China. Fortune will invest £1.7m for a 60% stake in the joint venture, Zhonglian Enterprise Development will take a 10% stake and Able Field 30%. A total of £2.9m will be invested in the joint venture and additional funds will come from bank debt or loans from Fortune. The cash will be invested in land rights and the construction of three LNG fuelling stations. It will require 60 LNG fuelling stations to supply 6,000 buses.