At first blush China Gas, a small company that distributes natural gas in Chinese cities, would seem unlikely to end up at the centre of a hostile takeover battle that has pitted a giant Chinese state-owned oil company against a diverse range of small investors, including energy companies from Korea, India and Oman.

Hong Kong-listed China Gas recently rejected a hostile offer from Sinopec, China’s largest oil and gas refiner by volume, and ENN, a Chinese gas distributor. But the takeover saga has heated up as several shareholders have increased their stakes in China Gas since the offer, in anticipation of a possible renewed bid from Sinopec and ENN.

The rare hostile takeover attempt underscores how high interest is running in China’s natural gas sector, and analysts and bankers believe that more consolidation is in store as China’s natural gas market matures.