Regional LNG: CNOOC forms JV to undertake Hainan LNG terminal project: Report

China?s third-largest oil producer, China National Offshore Oil Corp, said it has teamed up with Hainan's local government to build a liquefied natural gas (LNG) terminal and an auxiliary power plant in the southern island province, AFX-Europe reported Monday.

The gas terminal and auxiliary power plant will require a total investment of 7.5 billion yuan (US$ = 8.3 yuan).

The gas terminal, scheduled to start operations in June 2009, is designed to handle two million tons of LNG per year by 2012, increasing to three million tons three years later, CNOOC said in a statement.

This is CNOOC's fifth LNG project. The other four are located in the eastern and southern coastal provinces and cities of Guangdong, Zhejiang, Fujian and Shanghai.

Under the agreement signed over the weekend, a gas-fired power plant will also be built nearby, with an initial annual generating capacity of 700,000 kw. The capacity will rise to double in the second phase.

Meanwhile, CNOOC's power generating unit has agreed to invest an additional 580 million yuan in a local power plant -- Hainan Yangpu Power -- increasing its stake to 95 percent from 49 percent.

Its chemical arm is ready to inject 298 million yuan into Basuo port, a major Hainan port undergoing a revamp. The Hainan government will contribute 115 million yuan, the statement said.

Hainan governor Wei Chengliu was the ex-general manager of CNOOC. (*)