Shenzhen LNG regas terminal could cost $1 billion
A proposed LNG regasification terminal in China's western Shenzhen province may require an investment of as much as $8 billion (HK), according to local media.
OGJ Oil Diplomacy Editor
LOS ANGELES, Feb. 23 -- A proposed LNG regasification terminal in China's western Shenzhen province, designed to supply Hong Kong's CLP Holdings Ltd., may require an investment of as much as $8 billion (HK) ($1 billion), according to local media.
The South China Morning Post, citing unidentified sources, said CLP, which will own 24.5% of the project, would have to invest about $2 billion (HK), while PetroChina Co. would put in $4 billion for its 51% controlling stake and Shenzhen Gas Corp., $2 billion for its 24.5% interest.
The cost is slightly lower than the $10 billion LNG receiving terminal CLP proposed for South Soko Island off Lantau Island that the company scrapped in August 2008 after the Hong Kong and central Chinese governments agreed to source the fuel from Shenzhen.
"The project won't be cheaper, because gas storage tanks will have to utilize imported materials even though construction and land costs may be lower in Shenzhen," one source told SCMP.
The preliminary cost estimate of $8 billion marked another step forward for the LNG project after the parties settled their stake sizes and construction began 2 weeks ago on the 2,472-km West-East gas transmission pipeline that will transmit gas to Shenzhen from Central Asia.
Discussions were continuing on which party would be responsible for building a separate 16-km gas pipeline to transmit the fuel to CLP's gas-fired Black Point power plant in Tuen Mun from the planned LNG processing plant in Dachan Bay west of Shenzhen, sources said.
The processing plant will receive gas from Xinjiang in the northwest through the West-East pipeline and from LNG shipments from overseas oilfields. PetroChina owns the 93 billion yuan ($13 billion) pipeline as well as its interest in the LNG terminal project.
A CLP spokeswoman told SCMP that details of the LNG project such as gas pricing, volume, and timetable were still being discussed. PetroChina declined to comment.
A source estimated that CLP would likely source gas from the planned LNG terminal and from smaller gas fields of mainland offshore oil and gas supplier China National Offshore Oil Corp., whose existing supplies to CLP from Yacheng, Hainan, would run out by 2013.
CLP's Black Point power station consumes 3.4 bcm/year of gas.
Under an agreement between the Hong Kong and central Chinese governments, Hong Kong has been promised a supply of at least 1 bcm/year by 2013 when the pipeline will come online.
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