Construction of China's first liquefied natural gas (LNG) project is well on schedule, and the facility is expected to start operation in a year's time.

Thomas King, president of Guangdong Dapeng LNG Co, said the project remained on target for its scheduled June 2006 launch.

Dapeng LNG, which is owned by China National Offshore Oil Corp, BP Plc and some other local investors, is the operator of the LNG project.

About 60 percent of the construction work on the LNG terminal and 27 percent on the trunk lines has been completed.

The multi-billion-dollar project, located in southern China's Guangdong Province, will import LNG from North West Shelf gas fields in Australia to feed into a terminal in Shenzhen. The terminal will turn the liquids back to gas and deliver it through trunk lines to supply LNG-fueled power plants, industrial users and households in four major cities in Guangdong. The gas will also be delivered to Hong Kong.

The first-phase of the Guangdong LNG project is designed to process 3.7 million tons of LNG annually for more than two decades.

Guangdong Dapeng has all the project financing documents in place for the first loan drawdown next month, King said.

King added that detailed plans for operation of the project would be released in August.

Accounting for 12 percent of China's economic activity but scarce of energy resources, Guangdong is set to be a major gas importer to fuel its strong economic growth and to improve its energy mix.

Guangdong Dapeng is already planning the second phase of the LNG project, King said.

The country is expected to import up to 20 billion cubic meters of gas in 2010 growing to 70 billion cubic meters in 2020 to meet growing demand, said Nigel Baker, senior vice-president, commercial for gas, power & upstream of BP China.

In another development, a BP sponsored centre for LNG education and research was launched at Sun Yat-sen University in Guangzhou yesterday.

The 2,500-square meter centre is committed to supporting the booming LNG industry with technology and talent, said university president Huang Daren.

(China Daily May 24, 2005)