Regional LNG: China to buy more LNG tankers

China is expected to buy 10 liquefied natural gas tankers worth a combined $1.6 billion over the next few years, a top shipping industry official was quoted by Reuters on Saturday.

Qin Xiao, chairman of China Merchants Group Ltd, said it has teamed up with COSCO group and other firms to form a company to operate the LNG tankers.

"There will be LNG terminals in Guangdong, Fujian, Shandong and Shanghai," he said, naming four of China's most heavily developed coastal areas.

"Ten tankers is not a lot but we need (government) approval for each project," Qin said on the sidelines of China's annual session of parliament.

China is investing billion of dollars to source LNG -- natural gas super-cooled and condensed for transport -- from Australia and Indonesia, as the fast-growing country seeks to diversify its energy mix and ease its reliance on dirtier coal.

Qin said the first Chinese-made LNG tanker is expected to be delivered in 2005. Each tanker costs about $160 million, he said.

China is the world's third-biggest shipbuilder, but its technology generally lags behind leaders Japan and South Korea.

China's Hudong Zhonghua Shipbuilding Group is joining with French shipyard Chantiers de I'Atlantique to build China's first two liquefied natural gas tankers.

The tankers will ship the gas from Australia to China's southern province of Guangdong as part of a $14 billion deal to supply the country's first LNG terminal, an official with the Guangdong LNG Transportation Project office said.

Qin said the first phase of the Guangdong LNG project will need three to four tankers.

British oil major BP holds a 30-percent stake in the Guangdong terminal and China National Offshore Oil Corp, parent of listed CNOOC Ltd , is the leading shareholder with 33 percent.(*)