BP China is to start selling bottled liquefied petroleum gas (LPG) in the city for the first time.

Shanghai, the country's economic hub, is the first city in the East to have such a facility from the major oil company.

"I'm excited about entering the Shanghai market. We've been looking at it for a long time," said Ray Taylor, president of BP LPG China.

BP (Shanghai) LPG Co Ltd, a solely-owned business, formally started LPG retailing yesterday in the city's northern Baoshan District.

The company was formed after mergers with Waisihot Gas Co, a Shanghai-Hong Kong joint venture and a local company, Baocheng Gas Co, last month.

BP (Shanghai) LPG owns a 1,300-cubic-metre storage house and has 30 supply outlets scattered across the city.

With registered capital of US$3.5 million, the company is capable of supplying 35,000 to 40,000 tons of bottled LPG a year. The annual market demand stands at 450,000 to 500,000 tons.

The retailing business targets commercial facilities such as restaurants and hotels, which account for half of the total demand, and households, which accounts for 40 percent. Only a small amount of the product goes to industrial businesses.

Taylor said in the next two years, BP will expand its bottled LPG retailing to neighbouring Jiangsu Province. The company is already looking for acquisition possibilities in Suzhou, where BP has built its largest gas tank in China.

BP also has two gas tanks in Ningbo, Zhejiang Province, and in Zhuhai, Guangdong Province.

Since last year, BP has made a series of acquisitions in South China. It now has six solely-owned LPG retailing companies in the region, which have all proved successful.

With the opening of the latest retailing business, BP China is also launching a brand product the green BP LPG bottle.

"The green bottle is going to symbolize quality, safety and reliability," Taylor said.