(Yicai) Sept. 30 -- Shares of Jovo Energy soared after the Chinese importer and wholesaler of liquefied natural gas said it plans to invest up to CNY3.5 billion (USD485.2 million) in a large-scale coal-to-natural gas project in West China.

Jovo [SHA: 605090] closed 6.9 percent up at CNY34.69 (USD4.87) in Shanghai today, after hitting the 10 percent exchange-imposed daily limit in morning trading.

Jovo will act as an industrial investor for the second phase of a large coal-to-natural gas project with an annual natural gas output of four billion cubic meters in Yining, China's western Xinjiang Uygur Autonomous Region, the Jiangxi province-based firm announced yesterday.

The project's first phase, with an annual output of 1.5 billion cubic meters of natural gas, has already been completed and put into operation. Due to strong demand, it has been in full-load operation for some time.

With a total investment of CNY22 billion (USD3.1 billion), the project's second phase has two other investors in addition to Jovo, its developer Xinjiang Qinghua Energy Group and an investment fund under the Henan provincial government. The three investors will jointly contribute about CNY6.9 billion, with the remainder expected to be raised through loans from financial institutions.

After the second phase is completed in up to 36 months and put into operation, Jovo will obtain 50 percent of its natural gas production rights, based on its investment ratio.

The project's second phase is expected to consume nearly 11.8 million tons of raw coal a year, with the raw material coming from local mines in Yining. The annual water consumption will likely exceed 22.3 million cubic meters. The project has already secured a water use permit from regulatory authorities.

The natural gas produced by the project will be supplied through the main line of the West-to-East Gas Transmission Project to various parts of China.

China imported nearly 43 percent of the natural gas it needed to meet domestic demand last year. The firm noted that the implementation of this project will help the country reduce its external dependency on clean energy and achieve its dual carbon goals, as well as support Jovo in making up for its shortage of natural gas equity rights and building a diversified resource pool.

China Qinghua Energy Group, the parent company of project developer Xinjiang Qinghua Energy, is a large private enterprise focusing on the production of coal-based clean energy and fine chemicals. It is the world's first company to achieve the commercial operation of a coal-to-natural gas plant.

Editor: Futura Costaglione