PetroChina, the nation's largest oil producer, has received the initial go-ahead from the central government to build three liquefied natural gas (LNG) terminals in the coastal areas of Jiangsu, Hebei and Liaoning provinces.

"We have received the permission from the National Development and Reform Commission (NDRC) to conduct preliminary work in constructing the three terminals," a PetroChina senior vice-president told China Daily on the sidelines of an energy forum in Beijing.

The three LNG facilities will be located at Yangkou Port, Rudong of east China's Jiangsu Province, Caofeidian Port, Tangshan of north China's Hebei Province and Dalian of northeast China's Liaoning Province, said the senior official from PetroChina.

According to official regulations, oil companies have to obtain permission from the NDRC before commencing feasibility studies for LNG projects, and construction must not begin until the country's top policy-makers give the final nod to construction proposals based on previously prepared documentation.

Wu Ximin, an official from Yangkou Port, yesterday told China Daily the LNG project at Rudong got the government's initial green light at the end of April and they are currently busy with their feasibility research for the project.

"If everything proceeds smoothly, the construction is expected to kick off from June next year," Wu said.

The LNG facilities at Rudong will include a terminal capable of handling 3.5 million tons of liquefied natural gas annually in the first phase, which is expected to begin operations from 2010, as well as six 390-megawatt gas-fuelled power generators to drive the soaring local economy, said Wu.

The second phase, according to the official, will wrap up two years later, and almost double the annual LNG transaction capacity to 6 million tons.

A joint venture between PetroChina, Singapore RGMI Group and Jiangsu Guoxin Investment Group will pump a total of 16 billion yuan (US$1.9 billion) into the first-phase project.

PetroChina will take a controlling stake in the LNG terminal project, and the Singapore-based company will hold the majority stake in the gas power plants. Rudong terminal shareholders will organize an international bid to determine the source of LNG supplies when the project is finalized, according to the official.

Infrastructure construction is well under way at Yangkou Port on largescale supplementary projects such as the LNG venture and a crude oil dock.

A previous Xinhua report said PetroChina had inked an agreement with Dalian to invest 6.8 billion yuan (US$822 million) in building a terminal in the port city to supply 4 million tons of LNG annually to local consumers. "The project is scheduled to start operating from 2008," it said.

Officials at Dalian Municipal Development and Reform Commission and the Hebei Provincial Development and Reform Commission yesterday said they have not received the final go-ahead from the central government to start construction of the Dalian and Tangshan terminals.

Local media in Hebei reported the Caofeidian LNG terminal is designed to have an annual capacity to supply 8 billion cubic metres of LNG to gas users in North China around Beijing.

The oil giant had its shares suspended from trading in Hong Kong yesterday after reports that it may buy overseas assets from its parent China National Petroleum Corp (CNPC).

(China Daily June 10, 2005)