Regional LNG: CNOOC's Fujian LNG facilities break ground

China National Offshore Oil Company (CNOOC) Ltd., the country's largest producer of offshore crude oil and natural gas, announced that its liquefied natural gas (LNG) stations and pipeline project in Putian city, eastern Fujian Province broke ground on Friday, The China Daily reported.

"It signifies the start-up of the LNG project in Fujian Province," said Wu Zhenfang, vice president of CNOOC.

As the first part of the LNG project, the stations and pipeline construction were invested in and performed by the Zhonghai Natural Gas Company Ltd. of Fujian, a company jointly invested in by the CNOOC and the Fujian Investment and Development Corporation.

Covering an area of 37 hectares, the LNG receiving stations will be built in the Xiuyu Port of Putian city.

The first phase of the station and pipeline construction project, with an investment of 5.5 billion yuan (664 million US dollars), plans to have an annual LNG output of 2.6 million tons.

The pipeline laid in the first phase is 360 kilometers long, including a 315-km long trunk line and three laterals of 54 kms long. Starting from Xiuyu Port, the trunk line will go through five cities of the Fujian Province including Fuzhou, Putian, Quanzhou, Xiamen and Zhangzhou.

As a significant energy project of China's foreign cooperation, the LNG project will get natural gas pumped from the Tangguh natural gas field in Indonesia. It is also the second LNG project of CNOOC after its project in South China's Guangdong Province.

The LNG project is made up of 10 sub projects including the construction of the station and pipelines, transportation, three gas power stations in Putian, Jinjiang and Xiamen cities, and five urban gas use projects in Fuzhou, Putian, Quanzhou, Zhangzhou and Xiamen.

The construction of the project will be performed in two phases.

The first phase project is designed to have an annual LNG yield capacity of 2.6 million tons. With an investment of 24 billion yuan (2.9 billion US dollars), the first phase will be completed and put into operation at the end of 2007.

According to the plan, when the second-phase project is finished, the LNG project will have an annual yield capacity of five million LNG.

The use of LNG, a clean, efficient energy will relieve the pressure of the soaring demand for electricity in Fujian and improve the province's energy structure. It will also boost the growth of the LNG industry in China, a country featured in recent years by hiking energy consumption, said Wu.(*)