Regional LNG: China may complete Guangdong LNG project earlier: Report

China may finish construction of the second phase of the country's first liquefied natural gas project in 2007, one year ahead of schedule, due to high local demand for LNG, an official was quoted by Dow Jones as saying Thursday.

"It looks like that the second phase of the Guangdong LNG project will finish one year earlier," said Li Jianhua, director of Guangdong Energy Technology & Economy Research Center.

High demand for LNG in Guangdong, the southern province where the project is being built, has already exceeded the earlier envisaged 3 million metric tons a year, he said.

"Guangdong will need 3.7 million tons of LNG a year by 2006," when the first phase of the project is completed," he told Dow Jones Newswires at the China Oil & Gas Development Forum being held in Shanghai.

The original projection put Guangdong's LNG demand at 3 million tons a year by 2006. But demand has risen due to local plans to build more LNG power plants, the official said.

The first phase of the project, now under construction, is scheduled for completion in 2006, the year the construction of the second phase starts.

The second phase involves constructing a storage tank with capacity of 135,000 cubic meters, as well as building an LNG power plant and expanding another one.

In the first phase, China is building two LNG storage tanks with total capacity of 270,000 cubic meters, as well as an LNG terminal and four LNG power plants.

Australia has agreed to export LNG to the Guangdong project beginning 2006, at a rate of 3.25 million tons/year.

"A clause of the agreement allows China to buy 5% more of the agreed volume," the official added.(*)