PetroChina's liquefied natural gas terminal project in Jiangsu province, which received regulatory approval yesterday, will be completed three years later than the original estimate amid a lack of affordable gas imports to the country. Pacific Oil & Gas, PetroChina's partner of the US$952 million project, said it had just received approval from the National Development and Reform Commission on its feasibility study. Construction would start by the end of this year and commercial operation was planned for the first quarter of 2011, Pacific Oil said. That was later than the original estimate made two years ago. The project, first conceived in 1993 to diversify the province's energy sources and cut pollution, will also play a role in easing gas shortage in eastern China, which is underserved by PetroChina's US$5.2 billion, 3,800km gas pipeline that sources gas from the western region. The terminal, to be built on a man-made island off Yangkou port of Rudong city, will be capable of regasifying 3.5 million tonnes of liquefied gas annually in the first-phase development. The second phase will expand the volume to six million tonnes. 'LNG for the terminal will be sourced from the Middle East and other countries,' Pacific Oil said. Late last year, PetroChina signed a preliminary agreement to buy three million tonnes of LNG annually from Iran for 25 years. Industry sources said the company had agreed with National Iranian Gas Export on the gas price and was working on the contract terms, adding it was likely to be the first among the mainland's largest three state-owned oil firms to finalise a gas purchase contract. PetroChina declined to comment. A mainland industry executive said major new LNG supply would not be available until after 2011.