BEIJING Aug 18 (Reuters) – Chongqing Jianfeng Chemical Co Ltd, China’s first major industrial user of shale gas, said on Monday it swung to a loss in the first half of the year from a profit a year earlier due to the rising cost of gas.
The fertilizer maker started to take from last September shale gas from Fuling field, China’s first, large commercial shale gas project developed by Sinopec Corp, according to Jiangfeng’s website.
“Due to a continuously weak domestic chemical industry…and as the government started to raise gas prices since July of 2013, the company has been squeezed on both ends,” Jiangfeng said in a stock filing on Monday.
Jiangfeng, based in Chongqing, reported a net loss of 196.2 million yuan ($31.93 million) in the first half of 2014, versus a net profit of 24.2 million yuan a year earlier.
The company operates a 450,000 tonne-per-year ammonia facility and a 800,000-tonne-per-year urea plant.
Since last November, Jianfeng secures all its gas feedstock from the Fuling shale field and by end of March had used 254.7 million cubic metres of gas, according to its website.
Beijing introduced a new pricing scheme in July 2013 to bring its domestic natural gas prices closer to the cost of imports to encourage higher domestic output and greater intake of the cleaner-burning fuel by ships and pipelines.
The government raised then-average wholesale gas prices by 15 percent and last week announced a fresh hike of roughly 18 percent, though residential and fertilizer users were spared in the latest round of increases.
($1 = 6.1451 Chinese yuan) (Reporting by Chen Aizhu in Beijing and Lee Chyen Yee in Singapore; Editing by Matt Driskill)