Beijing's decision to proceed with a liquefied natural gas (LNG) project in Shenzhen could mean cheaper prices for SAR gas users and the end of the Hong Kong & China Gas (Towngas) monopoly in the territory. After months of delay, Beijing has decided to start scouting for a foreign partner and will announce details of the LNG project on August 8. The move is also likely to weigh heavily on the Hong Kong Government's decision on whether to introduce a competitive-based tariff system for gas supply. The Shenzhen plant could provide an alternative source of natural gas for the SAR. The Government is considering a tariff regime known as a common-carrier system, which is intended to allow Hong Kong's 1.3 million households connected to a gas pipeline choose their own supplier of gas. Competition could help push tariff prices lower and offer choices leading to better services and other consumer benefits. A government source said the Government 'will definitely consider the common-carrier system' after Shenzhen's expected establishment of an LNG plant within the next few years. The source stressed there were a number of problems that needed to be resolved before Hong Kong could adopt a common-carrier tariff system. An Economic Services Bureau spokesman said no time frame had been set on when to adopt the common-carrier system. Such a system would enable multiple suppliers to provide gas through the sole pipeline system. According to the Government source, issues to be addressed include the volume of gas to be supplied by the Shenzhen plant and the price of the Shenzhen-sourced gas. The plant is expected to cost US$600 million to build and have an annual capacity of three million tonnes after the first stage of development. The most thorny task is expected to be coming to an agreement with HK Gas over the opening of its pipeline to competitors. HK Gas managing director Alfred Chan Wing-kin had said previously that he believed it was feasible for Hong Kong to introduce natural gas and the company would possibly consider using it if it was less expensive than existing gas. He has repeatedly rejected the common-carrier idea and doubted the economic benefits of it. He argued that the cost of replacing all cooking and heating utensils in more than 1.3 million HK Gas-customer households would be substantial while the economic benefit of the common-carrier system would not be significant, as local gas consumption was not large. The Government's latest rethink on gas policy dates back to 1995 when the Consumer Council issued a report that accused HK Gas of becoming a natural monopoly in local gas supply. That report pressured the Government to conduct a feasibility study into introducing a common-carrier gas supply. The feasibility study, conducted by the Economic Services Bureau and completed in 1998, concluded that the common-carrier idea warranted consideration in view of its advantages. However, the Government said it was impossible to conclude if the system would be practical and effective due to uncertainties over a number of issues ranging from the availability of natural gas to economic benefits to consumers. CLP Holdings' Yacheng field in Hainan is Hong Kong's only source of natural gas at present.