Xinao Gas Holdings would press ahead with a 1.5 billion yuan liquefied natural gas (LNG) processing project in Wenzhou, Zhejiang, and might build a second such plant, chief executive Yang Yu said yesterday.
The Hebei-based gas distributor, whose first-half net profit rose 40 per cent to 175.49 million yuan while revenue soared 59.3 per cent to 2.3 billion yuan, was seeking National Development and Reform Commission approval for the Wenzhou project after obtaining a licence to import LNG last year.
The plant, the company's first LNG processing project, will help ensure stable supply of the clean fuel for the group's downstream urban gas distribution as the country's gas-led fuel policy leaves supply growth lagging behind that of demand.
'We plan to build one or two LNG receiving terminals in the mainland,' Mr Yang said.
The Wenzhou project, designed with a capacity to process three million tonnes of LNG annually, will provide an alternative source of the fuel to its 66 urban piped-gas projects around the country, which until now rely heavily on PetroChina's 3,840km west-to-east gas pipeline and an LNG terminal in Shenzhen.
Mr Yang conceded that the Wenzhou project would be challenged by high import prices after PetroChina signed an LNG purchase contract worth between A$35 billion (HK$232.2 billion) and A$45 billion with Australia's Woodside Energy.