Regional LNG: Sinopec to operate LNG terminal in 2008

China Petrochemical Corp., the nation?s second-biggest oil company, plans to start operating a receiving terminal for liquefied natural gas as early as 2008. The Jakarta Post reported Tuesday.

Sinopec, Group, as China Petrochemical is known, is planning LNG terminals and talking with potential gas suppliers from Russia?s Sakhalin project, said Zhang Yaocang, vice president of the Beijing-based company.

He declined to say where the terminal would be built. China wants to increase the consumption of natural gas to 8 percent in 2010 from about 3 percent now to reduce pollution and reliance on crude oil.

China National Offshore Oil Corp. received its first cargoes of LNG from Australia?s North West Shelf for the terminal it built in southern China?s Guangdong province.

?The key issue is securing supply,? Zhang said during an interview in Hangzhou in China? eastern province of Zhejiang Monday.

?The price of LNG in the international market is too high.?

Sinopec Group unit China Petroleum & Chemical Corp., Asia?s biggest oil refiner, said in June it is studying the feasibility of a $600 million LNG terminal in southern China?s Guangdong province.

The parent company has government approval for an LNG terminal in Shandong province, in the east.

China National said July 18 it has reached agreement with Indonesia to source LNG from the BP Plc-led Tangguh project for a terminal it is building in southeastern China?s Fujian province. It is also in talks to buy gas from Malaysia for another terminal in Shanghai, China?s commercial center.

LNG is natural gas that has been chilled to liquid form, reducing it to one-six hundredth of its original volume, for transportation by ship to destinations not connected by pipeline. On arrival, it?s turned back into gas for distribution to power plants and other buyers. (*)