(Yicai Global) Dec. 16 -- Shares of Jin Tong Ling Technology Group surged after the Chinese turbomachinery supplier unveiled plans to develop hydrogen production projects in western China.

The shares [SHE: 300091] closed up 6.2 percent at CNY6.39 (USD1) today, after soaring as much as 7 percent at one point. The broader Shenzhen market rose 0.6 percent.

Jin Tong Ling will form a joint venture with Hydrogenergy Technology to develop an integrated project for hydrogen production by water electrolysis, hydrogen storage and transportation, hydrogenation and application in several provinces in western China, the Nantong-based company said in a statement late yesterday.

Jin Tong Ling will have an 80 percent stake in the JV, it said. Beijing-based Hydrogenergy and local governments where the projects are located will own the rest.

The first project, with an estimated investment of CNY230 million (USD36 million), will be in northwestern China’s Ningxia Hui Autonomous Region. Hydrogenergy will be the project’s general contractor, technical chief, and core equipment designer. Jin Tong Ling or its subsidiaries will make the core equipment and carry out the plant’s construction work.

The company did not give more details about the production scale and construction schedule of the Ningxia plant.

The two sides plan to invest further to build similar projects in western regions such as Gansu and Guizhou provinces, Inner Mongolia Autonomous Region, and Xinjiang Uygur Autonomous Region, which are rich in photovoltaic and wind energy resources, the firm said.

They will also initiate due diligence on Jin Tong Ling’s investment in Hydrogenergy, the statement said. Jin Tong Ling will acquire no more than 35 percent of Hydrogenergy’s shares after the transaction, according to the plan.

Hydrogenergy is one of the few engineering technology development companies in China that is capable of designing, producing, and supplying large hydrogen production units. The production, storage and refueling equipment developed by the firm has been used in over 60 large domestic and foreign projects, such as China’s Daya Bay Nuclear Power Plant and Vietnam’s Hai Phong Power Plant.

Jin Tong Ling has been focusing on developing and manufacturing large turbomachinery. It recently developed two hydrogen fuel cell compressors with Switzerland’s Celeroton, and is building production lines in China, which are expected to come into operation early next year.

Editor: Peter Thomas