* CEO says in talks regarding gas distribution acquisition
* Could look to raise funds when firm lists in Hong Kong
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By Sarah Young
LONDON, April 15 (Reuters) - Chinese independent energy company Green Dragon Gas is in talks over a $50 million acquisition as it looks to expand its gas distribution network ahead of a planned ramp-up in production.
"We are in active negotiations, conducting due diligence and based on what we see in our due diligence we ought to be able to structure a deal," chief executive Randeep Grewal said in an interview on Friday.
The potential target has gas distribution infrastructure in a location to which Green Dragon wants access and will be worth around $50 million depending on due diligence, said Grewal.
Green Dragon is developing large coal bed methane resources in China, where it believes it is the largest gas company not owned by the state.
"Green Dragon will be profitable exiting 2013. Our production is going to grow eighteen-fold," said Grewal, adding the company planned to spend $250 million on a well drilling programme over the next few years.
Grewal said the company has $150 million of cash and could look to raise additional funds when it seeks an additional listing in Hong Kong, a long-stated aim.
"Assuming we get exchange approval we'd like to see ourselves listed on the main board in Hong Kong prior to year end," Grewal said.
"We need at least $100 million but depending on valuation we may raise significantly more money than that, but it will really depend on valuation."
Green Dragon plans to sell some of the gas it produces to Chinese consumers at outlets where gas can be used to fuel specially-converted cars, while the balance will be provided to Chinese state majors such as PetroChina and Sinopec, said Grewal.
Green Dragon, which spun out its drilling operation in February, currently has four retail outlets operating, and will bring 24 more on stream by the end of this year, seeking to further expand its network through acquisitions.
Shares in Green Dragon, in which Grewal owns a 66 percent stake, were flat at 12.4 pence at 1133 GMT, valuing the company at $1.6 billion. (Editing by Mark Potter)