TAIYUAN CITY, China, Dec. 10 /PRNewswire-Asia/ -- Longwei Petroleum Investment Holding Ltd. (OTC Bulletin Board: LPIH), a leading distributor of diesel, gasoline, fuel oil, and solvent oil operating in the Shanxi Province in China, today announced it has executed a Purchase and Sale Agreement with Taiyuan Coal Gasification Group Rail Transport Company, pursuant to which Taiyuan has agreed to purchase 30,000 metric tons of finished oil products from Longwei Petroleum to be delivered in 2009. Valued at an estimated US$24.1 million, the order represents one of the largest single contracts in Longwei's industrial customer base.
Mr. Cai Yongjun, chief executive officer of Longwei, commented on the agreement: "We are extremely pleased to announce the execution of this contract, as it serves to expand our revenue channels. We expect the relationship to grow and are excited to work with this significant Rail Transport Company."
According to the "2008-2010 Chinese Oil Product Market Analysis and Investment Consulting Report" published by China Industries Research Reports online, demand for petroleum remains relatively strong in China due to continued economic growth even amid the current world economic climate. China has the largest petroleum consumption growth rate, currently at over 30%. China's petroleum consumption in U.S. dollars was 5.33% of the world consumption in 1997, and it increased to 8.48% of the world consumption in 2006. Professionals of China National Petroleum Corporation predicted that the demand for petroleum in China will be 0.268 billion tons in 2010 and 0.305 billion tons in 2020.
The Shanxi Province is one of the largest energy providers and transport cities in China. Last year, the highway freight volume was ranked fifth in the entire country. Shanxi has 4,692 gas stations, about 4 million cars, and a number of large-scale industrial enterprises and power plants that keep demand for coal, electricity, gas, and oil high.
About Longwei Petroleum Investment Holding Ltd.
Longwei is one of leading diesel, gasoline, fuel oil and solvent oil distributors/wholesalers in Taiyuan City, Shanxi Province, P.R. China. Longwei sells products mainly to large-scale gas stations, coal plants and power supply companies, and on a slighter scale to small, independent gas stations. The Company engages its business through its subsidiary, Longwei Trading, located in Taiyuan City, Shanxi Province. Longwei owns one state-of-the-art fuel storage facility at Taiyuan City, Shanxi Province, P.R. China. The facility includes 14 storage tanks with a total capacity of 50,000 metric tons and has ISO9000 certification.
About Taiyuan Coal Gasification Group Rail Transport Company
Rail Transport Company is responsible for all railway transportation operations, railway sector co-ordination of factories, mined raw materials and products transportation in Shanxi Province which are owned by Taiyuan Coal Gasification Group. The Company services Shanxi Coal Preparation Plant, Shanxi Coking Plant, Dier Coking Plant, Shanxi Gasworks and such companies through Yijing Station, which belongs to North Railway Station. Taiyuan also provides rail transportation in the Gujiao mining area. It services Lu Mine and Ja Mine for train transportation through Chendi Station.
Forward-Looking Statements
Certain statements contained herein constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations, estimates and projections about Longwei's industry, management's beliefs and certain assumptions made by management. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Because such statements involve risks and uncertainties, the actual results and performance of the Company may differ materially from the results expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Longwei's operations are conducted in the PRC and, accordingly, are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company's results may be adversely affected by changes in the political and social conditions in the PRC and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation. Other potential risks and uncertainties include but are not limited to the ability to procure, properly price, retain and successfully complete projects, and changes in products and competition. Unless otherwise required by law, the Company also disclaims any obligation to update its view of any such risks or uncertainties or to announce publicly the result of any revisions to the forward-looking statements made here. Readers should review carefully reports or documents the Company files periodically with the Securities and Exchange Commission.
