Hong Kong electric company plans floating LNG terminal near Soko Islands

CLP Power is eyeing the eastern waters of the Soko Islands, off southern Lantau, for a floating liquefied natural gas (LNG) terminal that will enable it to tap more gas from international markets.

This will come nearly a decade after it shelved a land-based version of the project in the southern Sokos despite government approval. A 25-year gas deal with the mainland was signed instead.

The project will help it meet new requirements for half of the city’s electricity needs to come from natural gas after 2020.

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CLP, which supplies Lantau, Kowloon and the New Territories, remains tight-lipped on details such as costs and tariff implications, but said the facility would provide the city with additional sources of gas at more competitive market prices and spread out price risks.

CLP’s gas is now piped from Central Asia via the Second West-East Gas Pipeline as part of the contract with the mainland and from the depleting Yacheng gas field near Hainan. As a result,it has little bargaining power over prices.

HK Electric, which supplies Hong Kong and Lamma, obtains Australian and Qatari gas via an LNG receiving terminal in Dapeng, Shenzhen.

“If we don’t have another source…we will have to continue to buy gas from the mainland and our bargaining power will remain weak,” said CLP senior director Edward Chiu On-tin.

The offshore facility, spanning less than a hectare in size, will likely handle about 30 to 50 carriers a year. LNG transferred to the terminal will be converted back into gas and piped to Black Point Power Station in Tuen Mun for use in power generation.