Chinese firms to build 3,600 MW power plant fueled by Indonesian LNG

Several Chinese companies are considering building a power plant in the southeast, which will be fueled by liquefied natural gas imports from Indonesia, Dow Jones quoted a China-based industry official Friday.

The power plant, which will be located in Quanzhou city in Fujian province, will likely have an annual generation capacity of 3,600 megawatts and will use about 1.7 million metric tons a year of LNG, he said.

China National Offshore Oil Corp., or CNOOC, will likely take a stake of around 25 percent in the power plant, he said, declining to give an estimate of the investment.

Fujian Investment & Development Corp. and local power entities will hold the remaining stakes, the official said.

He said 3,600 MW is the total power generation capacity CNOOC and the Fujian companies plan to build by 2007. The capacity is likely to be split among two power plants, pending central government approval.

The other LNG-based power plant will likely be located in Xiamen city of the province, he said.

"If the government opts to build only one power plant in Fujian, it will be the one in Quanzhou, with a capacity of 3,600 megawatts," he said.

It makes more sense to build the plant in Quanzhou, "because local power supply can't meet the demand...and one of the LNG pipeline networks will pass through the city," he said.

In addition to the power plants, China will also build five LNG pipeline networks in the cities of Fuzhou, Putian, Quanzhou, Xiamen and Zhangzhou in Fujian province, the official said.

As reported, CNOOC will hold a 60 percent stake in a 2.5 million-ton LNG terminal in Fujian, with Fujian Investment & Development Corp. holding the other 40 percent.

The terminal will be built at Meizhou Gulf on the East Coast of the province by 2006-2007.

CNOOC, China's sole offshore oil operator, has agreed to buy LNG from Indonesia 2.6 million tons annually for 25 years starting 2007.(*)