Beijing Gas Blue Sky : Continuing Connected Transaction

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited (the ''Stock Exchange'') take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

Beijing Gas Blue Sky Holdings Limited

北京燃氣藍天控股有限公司

(Incorporated in Bermuda with limited liability)

(Stock Code: 6828)

CONTINUING CONNECTED TRANSACTION

THE AGREEMENT

The Board is pleased to announce that on 16 September 2020, Beijing Beilan, an indirect wholly-owned subsidiary of the Company, entered into the Agreement with Kunlun Shihua, pursuant to which Kunlun Shihua agreed to sell and Beijing Beilan agreed to purchase LNG for a period from 16 September 2020 to 31 January 2021 (both days inclusive).

LISTING RULES IMPLICATIONS

As at the date of this announcement, KunLun Energy, through its wholly-owned subsidiary, Shennan Petroleum Technology, is a substantial shareholder (as defined under the Listing Rules) of Haikou Xinyuan, a non wholly-owned subsidiary of the Company, and is, therefore, a connected person of the Company at the subsidiary level. KunLun Energy in turns indirectly holds 30% equity interest of Kunlun Shihua. Therefore, Kunlun Shihua is an associate (as defined under the Listing Rules) of Shennan Petroleum Technology and is a connected person of the Company at the subsidiary level under the Listing Rules. Accordingly, the transactions contemplated under the Agreement constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules.

Since (i) Kunlun Shihua is a connected person of the Company at subsidiary level; (ii) the Directors (including the independent non-executive Directors) have approved the Agreement and the transactions contemplated thereunder; (iii) the independent non-executive Directors have confirmed that the terms of the transactions contemplated under the Agreement are fair and reasonable, on normal commercial terms and in the interests of the Company and the Shareholders as a whole. The Agreement and the transactions contemplated thereunder will constitute continuing connected transactions of the Company which are only subject to the reporting and announcement requirements, but are exempted from the circular, independent financial advice and shareholders' approval requirements pursuant to Rule 14A.101 of the Listing Rules.

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None of the Directors has any material interest in the Agreement and the transactions contemplated thereunder, and none of the Directors has abstained from voting on the board resolutions approving the Agreement and the transactions contemplated thereunder.

INTRODUCTION

The Board is pleased to announce that on 16 September 2020, (after trading hours), Beijing Beilan, an indirect wholly-owned subsidiary of the Company, entered into the Agreement with Kunlun Shihua, pursuant to which Kunlun Shihua agreed to sell and Beijing Beilan agreed to purchase LNG for a period from 16 September 2020 to 31 January 2021 (both days inclusive).

PRINCIPAL TERMS OF THE AGREEMENT

Date:	16 September 2020 (after trading hours)
Parties:	(i)	Beijing Beilan, an indirect wholly-owned subsidiary of the Company;
		and
	(ii)	Kunlun Shihua, an associate (as defined under the Listing Rules) of
		Shennan Petroleum Technology which is a substantial shareholder (as

defined under the Listing Rules) of Haikou Xinyuan and a wholly- owned subsidiary of KunLun Energy. As KunLun Energy indirectly holds 30% equity interest of Kunlun Shihua, Kunlun Shihua is therefore a connected person of the Company at the subsidiary level under the Listing Rules.

Term

Pursuant to the Agreement, Kunlun Shihua agreed to sell and Beijing Beilan agreed to purchase LNG for a period from 16 September 2020 to 31 January 2021 (both days inclusive).

Basis of Pricing

Beijing Beilan shall purchase 6,000 tons of LNG per month within the aforementioned period. The actual amount of purchase of LNG will be subject to the quantity confirmed in the price and quantity confirmation letter by both parties and will depend on the supply and demand of the market and the utilization plan of Beijing Beilan.

Pursuant to the Agreement, the pricing for the sale and purchase of LNG is determined by arm's length negotiations on normal commercial terms and is in accordance with the following principles:

1. The benchmark price quoted by Sinopec's receiving terminal and confirmed by both parties by way of quotation letter;
2. The quantity of gas supply guaranteed by and the distribution services provided by Kunlun Shihua; and
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1. The purchase price from Kunlun Shihua will be no less favourable than the purchase price from the Independent Third Parties purchasing at the same time of similar order quantities.

During the current month's supply of LNG, the parties may adjust the purchase price by mutual agreement in case of any change on the benchmark price.

Payment

Beijing Beilan shall pay in advance RMB10,000,000 and any amount exceeds RMB10,000,000 shall be paid upon receipt of the LNG.

Annual Cap

The Annual Cap of the Agreement for the period commencing from 16 September 2020 to 31 January 2021 is RMB105,360,000 (equivalent to approximately HK$119,436,000).

The Annual Cap is determined based on the followings:

1. the estimated purchase quantity of the LNG at 6,000 tons per month by Beijing Beilan; and
2. a preliminary estimate with reference to the average price of LNG in the past 20 months of approximately RMB3,512 per ton.

The actual settlement amount shall be calculated based on the actual sale and purchase quantity of LNG between the parties and the market price of LNG.

Should the actual settlement amount exceed the above Annual Cap, the Company will revise the Annual Cap in compliance with the relevant requirements under Chapter 14A of the Listing Rules.

REASONS FOR AND BENEFITS OF ENTERING INTO THE AGREEMENT

The Company is an investment holding company. The Group is principally engaged in (i) development and operation of city gas projects; (ii) direct supply of LNG to industrial end users;

1. trading and distribution of compressed natural gas ("CNG") and LNG; and (iv) operating
   CNG and LNG refueling stations for vehicles.

Beijing Beilan is a company established in the PRC with limited liability and an indirect wholly-owned subsidiary of the Company, and principally engaged in the trading and distribution of natural gas.

As informed by Kunlun Shihua, Kunlun Shihua is a company established in the PRC with limited liability, and principally engaged in, among other things, trading of LNG and operation of LNG refueling stations.

The Agreement between Beijing Beilan and Kunlun Shihua was entered into by Beijing Beilan in the ordinary and usual course of business of the Group. The sale of LNG by Kunlun Shihua to Beijing Beilan can provide the Group with a stable and available gas source of LNG.

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In light of the above, the Directors (including the independent non-executive Directors) consider that the Annual Cap has been determined on an arm's length basis and the Agreement was entered into on normal commercial terms in the ordinary and usual course of business of the Company after arm's length negotiation, and the terms are fair and reasonable, and in the interests of the Company and the Shareholders as a whole.

LISTING RULES IMPLICATIONS

As at the date of this announcement, KunLun Energy, through its wholly-owned subsidiary, Shennan Petroleum Technology, is a substantial shareholder (as defined under the Listing Rules) of Haikou Xinyuan, a non wholly-owned subsidiary of the Company, and is, therefore, a connected person of the Company at the subsidiary level. KunLun Energy in turns indirectly holds 30% equity interest of Kunlun Shihua. Therefore, Kunlun Shihua is an associate (as defined under the Listing Rules) of Shennan Petroleum Technology and is a connected person of the Company at the subsidiary level under the Listing Rules. Accordingly, the transactions contemplated under the Agreement constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules.

Since (i) Kunlun Shihua is a connected person of the Company at subsidiary level; (ii) the Directors (including the independent non-executive Directors) have approved the Agreement and the transactions contemplated thereunder; (iii) the independent non-executive Directors have confirmed that the terms of the transactions contemplated under the Agreement are fair and reasonable, on normal commercial terms and in the interests of the Company and the Shareholders as a whole. The Agreement and the transactions contemplated thereunder will constitute continuing connected transactions of the Company which are only subject to the reporting and announcement requirements, but are exempted from the circular, independent financial advice and shareholders' approval requirements pursuant to Rule 14A.101 of the Listing Rules.

None of the Directors has any material interest in the Agreement and the transactions contemplated thereunder, and none of the Directors has abstained from voting on the board resolutions approving the Agreement and the transactions contemplated thereunder.

DEFINITIONS

In this announcement, the following expressions shall have the following meanings unless the context otherwise requires:

"Agreement"the LNG purchase agreement dated 16 September 2020 entered into between Beijing Beilan and Kunlun Shihua, pursuant to which Kunlun Shihua agreed to sell and Beijing Beilan agreed to purchase LNG for a period from 16 September 2020 to 31 January 2021 (both days inclusive)

"Annual Cap"the proposed aggregate annual value for the CCT contemplated under the Agreement

"associate"

has the meaning as ascribed thereto under the Listing Rules

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"Beijing Beilan"	北京北燃藍天能源有限公司 (Beijing Beiran Blue Sky Energy Co.,
	Ltd.*), a company established in PRC with limited liability and is an
	indirect wholly-owned subsidiary of the Company
"Board"	the board of Directors
"CCT"	the transactions to be entered into between Beijing Beilan and
	Kunlun Shihua on an ongoing basis pursuant to the Agreement
"Company"	Beijing Gas Blue Sky Holdings Limited, a company incorporated in
	Bermuda with limited liability, the issued Shares of which are listed
	on the main board of the Stock Exchange (Stock Code: 6828)
"connected person"	has the same meaning as ascribed to it under the Listing Rules
"Director(s)"	the director(s) of the Company
"Group"	the Company and its subsidiaries
"HK$"	Hong Kong dollars, the lawful currency of Hong Kong
"Haikou Xinyuan"	海口鑫元天然氣技術股份有限公司 (Haikou Xinyuan Natural Gas
	Technology Co., Ltd.*), a company established in the PRC with
	limited liability and an indirect non wholly-owned subsidiary of the
	Company

"Hong Kong"

"Independent Third

Party(ies)"

Hong Kong Special Administrative Region of the People's Republic of China

the independent third party(ies) who is/are, to the best of the Directors' knowledge, information and belief having made all reasonable enquiry, independent of and not connected with the Company and the connected person(s) (as defined in the Listing Rules) of the Company

"KunLun Energy"	KunLun Energy Company Limited, a company incorporated in the
	Bermuda with limited liability, the shares of which are listed on the
	main board of the Stock Exchange (Stock Code: 135)
"Kunlun Shihua"	山東昆侖實華天然氣有限公司 (Shandong Kunlun Shihua Natural
	Gas Co., Ltd*), a company incorporated in PRC with limited
	liability and its 30% equity interest is indirectly owned by KunLun
	Energy
"Listing Rules"	the Rules Governing the Listing of Securities on The Stock
	Exchange
"LNG"	liquefied natural gas
"PRC"	the People's Republic of China, and for the purpose of this
	announcement excluding Hong Kong, the Macau Special
	Administrative Region of the PRC and Taiwan

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"RMB"	Renminbi, the lawful currency of the PRC
"Share(s)"	ordinary share(s) of HK$0.055 each in the issued share capital of the
	Company
"Shareholder(s)"	the shareholder(s) of the Company
"Shennan Petroleum	海南中油深南石油技術開發有限公司 (Hainan China Petroleum
Technology"	Shennan Petroleum Technology Development Co., Ltd.*), a
	company established in the PRC with limited liability and a wholly-
	owned subsidiary of KunLun Energy and holding 20% equity
	interest in Hainan Xinyuan
"Stock Exchange"	The Stock Exchange of Hong Kong Limited
"%"	per cent.

• The English translation of Chinese names or words in this announcement, where indicated, are included for information purpose only, and should not be regarded as the official English translation of such Chinese names or words.

By order of the Board

Beijing Gas Blue Sky Holdings Limited

Zhi Xiaoye

Chairman

Hong Kong, 16 September 2020

As at the date of this announcement, the executive directors of the Company are Mr. Li Weiqi, Mr. Jin Qiang, Ms. Yang Fuyan and Mr. Ye Hongjun; the non-executive directors of the Company are Mr. Zhi Xiaoye and Mr. Cheng Ming Kit; and the independent non-executive directors of the Company are Mr. Lim Siang Kai, Mr. Wee Piew, Mr. Ma Arthur On-hing, Mr. Cui Yulei and Ms. Hsu Wai Man Helen.

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