CNOOC to start building LNG receiving terminal in Hainan

CNOOC Ltd (0883.HK: Quote), China's leading liquefied natural gas (LNG) importer, hopes to start building an LNG receiving terminal in Hainan in March 2011 to supply gas from early 2014, a company executive was quoted as saying by a local newspaper, four years later than previously scheduled.

"The project has won initial government approval, the ground has been levelled, and an application will be submitted to the National Development and Reform Commission for final approval this month," Tang Xinchuan, head of CNOOC Hainan Natural Gas Corp and CNOOC Transmission Corp, told the Hainan Daily.

The first phase of the Hainan LNG project was designed to receive 2 million tonnes of the super-cooled gas per year. Capacity would be expanded to 3 million tonnes after the second phase is completed, it said.

The first phase was expected to cost 6.5 billion yuan ($958.4 million), the newspaper reported.

CNOOC supplies the island province of Hainan with 2.6 billion cubic metres (bcm) of gas per year from Dongfang 1-1 gasfield, 2 bcm from Ledong field and 500 million cubic metres from Ya 13-1 field, all located near near the island.

Most of the gas was used as a feedstock by chemical companies and as fuel by power plants, and producers of paper and glass, the paper added.