Southern China Receives First LNG Shipment

by Mary Swire, for LawAndTax-News.com, Hong Kong

01 June 2006

According to the Xinhua state news agency, China's first shipment of imported liquefied natural gas (LNG) arrived from Australia at the LNG terminal in the Guangdong Province in Southern China on Friday.

The 60,000-ton cargo came from the Northwest shelf of Australia, a source from the China National Offshore Oil Corporation (CNOOC), China's largest offshore oil and gas producer and the project's largest shareholder, told Xinhua.

The second shipment is due to arrive on June 27, according to CNOOC.

The report went on to reveal that the terminal in Shenzhen city will be connected to a trunkline for distribution, a project which is set to begin operation in June.

Guangdong Dapeng LNG Company Limited will be in charge of construction and operation of the project, on behalf of its 11 foreign and domestic shareholders.

3.7 million tons of LNG will be supplied annually to the terminal by Northwest Shelf Australia LNG venture project, under a 25-year contract.

The government news service went on to reveal that phase one of the project has been completed at a cost of 7.1 billion yuan (US$887.5 million).

Besides the terminal and trunkline, phase one also comprises four gas-fired power plants, two Hong Kong user projects, one oil-to-gas conversion project, four city gas pipeline networks, an LNG transportation project and an LNG carrier construction project.

China's energy supply and consumption structure has traditionally been based on coal, but the government plans to build 10 or 11 LNG terminals by 2010, increasing imports to 30 million tons in the year, according to Xinhua.

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