· Supply of Pipeline Industrial Gas
The Group’s pipeline industrial gas is produced and transmitted to its customers via pipelines. The Group’s production facilities are all located on or in close proximity to the production facilities of its pipeline industrial gas customers and the Group considers the pipeline industrial gas customers to be on-site customers. During the periods comprising the three years ended 31 December 2019 and the six months ended 30 June 2020, The Group had four pipeline industrial gas production plants in operation, namely the TTG headquarters plant, the TTG Ironmaking Branch plant, the TTG Stainless Steel Branch plant and the TTG Laoting Branch plant. The Group is responsible for maintaining all distribution pipelines, so that the Group can better ensure reliability and stability of its industrial gas supplies.
· Supply of Liquefied Industrial Gas
To maximise the utilisation of its designed production capacity and increase its revenue, the Group also engages in the supply of liquefied industrial gas. The Group‘s liquefied industrial gas products include oxygen, nitrogen, argon and carbon dioxide. Liquefied oxygen and nitrogen are obtained after oxygen and nitrogen in gas form are generated at the ASUs and further processed through the liquefier. While argon is generated together with oxygen and nitrogen in gas form during the same production process, it is in liquid form as the end product. The Group produces and sells liquefied oxygen and nitrogen only after all demand for pipeline oxygen and nitrogen is satisfied, thereby increasing utilisation of its ASUs. Carbon dioxide is produced in a separate production line independent from the production of oxygen, nitrogen and argon.
· LNG-Related Business
The Group’s LNG-related business includes the supply of LNG and the provision of gas transmission service. The supply of LNG refers to the production and sales of LNG products. The provision of gas transmission service refers to COG pressurisation and transmission service and such service is provided via pipelines which are independent from the pipelines used for its supply of pipeline industrial gas. The Group started its LNG-related business in 2014 with the intention to diversify its gas products and in contemplation of a growing demand for LNG in the Jing-Jin-Ji Region. Luanxian Tangsteel Gases, the operating subsidiary for its LNG-related business, was established in December 2013. In early 2014, its LNG production commenced at the Luanxian plant. The Group also started providing gas transmission service which was supported by the equipment and machinery used for its LNG-supply business, such as compressors.