Towngas and liquefied petroleum gas (LPG) are the two main types of fuel gas widely used throughout Hong Kong for domestic, commercial and industrial purposes. In addition, LPG is used as a fuel for LPG taxis and light buses, and natural gas is used for electricity generation.

Hong Kong has about two million gas customers in the domestic, commercial and industrial sectors. In 2004, Towngas accounted for 80 per cent of the total fuel gas sold in energy terms, and LPG for 20 per cent.

Towngas is manufactured at plants in Tai Po and Ma Tau Kok, both using naphtha as feedstock. They have output capacities of 8.4 and 2.6 million cubic metres per day, respectively. Towngas is supplied through an integrated distribution system to about 1.52 million customers. The mains network extends throughout Hong Kong via a 127-kilometre high-pressure pipeline and some 2 978 kilometres of distribution mains.

LPG is imported into Hong Kong by sea and stored at five terminals on Tsing Yi Island before being distributed to approximately 738 000 customers and LPG vehicle filling stations. In 2004, about 22 per cent of total sales was supplied in cylinders by some 234 appointed gas distributors (operating 581 cylinder wagons), about 14 per cent was distributed to bulk storage installations providing piped LPG supplies to residential and commercial developments, and the remaining 64 per cent to vehicle filling stations as fuel for more than 19 000 LPG taxis and light buses. Cylinder LPG is now used in less than 24 per cent of domestic dwellings.

Natural gas is currently used for power generation at the Black Point and Castle Peak power stations. It is imported from the Yacheng 13-1 gas field off Hainan Island in southern China via a 780-kilometre high-pressure submarine pipeline.

The Gas Safety Ordinance regulates the importation, manufacture, storage, transport, supply and use of fuel gas. All gas supply companies, gas installers and contractors must be registered with the Gas Authority (the Director of Electrical and Mechanical Services) to carry out their operations. At year-end, there were seven registered gas supply companies, 3 533 registered gas installers and 432 registered gas contractors.