Towngas and liquefied petroleum gas (LPG) are the main types of fuel gas used in Hong Kong for domestic, commercial and industrial purposes. LPG is also used as a fuel by some taxis and light buses while natural gas is used for electricity generation and production of towngas.

Hong Kong has about 2.3 million gas customers in the domestic, commercial and industrial sectors. In 2006, Towngas accounted for 82 per cent of total fuel gas sold in these sectors, while LPG accounted for 18 per cent.

Towngas is manufactured at plants in Tai Po and Ma Tau Kok, the former using natural gas and naphtha as dual feedstock and the latter using naphtha as feedstock. They have output capacities of 9.66 and 2.6 million cubic metres per day, respectively. Towngas is supplied through an integrated distribution system to about 1.6 million customers. The mains network extends throughout Hong Kong via a 142-kilometre high-pressure pipeline and some 3 094 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 706 000 customers and 56 LPG filling stations. In 2006, about 17 per cent of the gas sold was in cylinders provided by some 332 appointed gas distributors. About 11 per cent was distributed to bulk storage installations which piped the gas to residential and commercial developments, and the remaining 72 per cent to filling stations as fuel for more than 20 000 LPG taxis and light buses. Cylinder LPG is now used in about 21 per cent of households.

Natural gas is imported from the Yacheng 13-1 gas field off Hainan Island in southern China via a 780-kilometre submarine pipeline to the Black Point and Castle Peak Power Stations for electricity generation. In 2006, the newly built liquefied natural gas (LNG) terminal in Shenzhen started to supply natural gas through a 93-kilometre submarine pipeline to Lamma Power Station for electricity generation. The same LNG terminal also supplies natural gas through a 34-kilometre twin submarine pipeline to Tai Po plant for production of towngas.

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 who is the Director of Electrical and Mechanical Services. At year-end, there were nine registered gas supply companies, 3 707 registered gas installers and 452 registered gas contractors.