(Yicai) Jan. 5 -- Shares in Suyan Jingshen climbed today after the Chinese salt mine developer said it will invest in the government of eastern Jiangsu province's compressed air energy storage project, which uses compressors to compress air during off-peak grid times and store it until peak times when the compressed air is released to generate electricity, that is costing a total of CNY3.6 billion (USD498 million).

Suyan Jingshen’s stock price [SHA: 603299] was trading up 0.2 percent at CNY8.74 (USD1.22) as of 1.30 p.m. today. Earlier in the day it advanced 2.9 percent to CNY8.98.

The facility, which will be located in Huai’an, will be outfitted with two 250 megawatt compressors and have an energy storage capacity of 2,250-megawatt hours, the company, which is also based in Huai’an, said yesterday. No further details, including the construction timetable, were provided.

Suyan Jingshen will inject cash and non-monetary assets for a 35 percent stake in a joint venture with an investment firm under the Jiangsu government that will be responsible for the investment, construction and operation of the project, it said.

This will make it the second-largest stakeholder after the Jiangsu province investment firm which will pay cash for a 60 percent stake. Another investment company owned by the Huai’an government will hold 6 percent equity.

In recent years Suyan Jingshen has been using the underground space formed after its salt mining activities for energy storage projects. In early 2022, it teamed up with oil major PetroChina on an underground gas storage project, in which it is the majority shareholder.

Editor: Kim Taylor