China National Petroleum Corporation (CNPC), the country's biggest oil producer, broke ground on Friday for the construction of its first liquefied natural gas (LNG) terminal in Dalian, a port city in northeastern Liaoning Province.

The project, with a total investment of over 10 billion yuan (about US$1.4 billion), consists of a wharf, a receiving facility and transportation pipelines. It is designed to receive supplies from Qatar, Australia and other overseas markets.

The terminal is designed to store 3 million tonnes of LNG and supply 4.2 billion cubic meters of gas every year in the first phase, which would expand to 6 million tonnes and 8.4 billion cubic meters in the second phase.

CNPC is also building a LNG receiving facility in Rudong County of east Jiangsu Province.

Experts predicted that by 2020 China would import 10 million tonnes of LNG annually, boosting the interests of oil giants to build LNG projects.

To secure LNG supply, PetroChina, CNPC's listed subsidiary sealed a deal with Qatargas and Shell for 3 million tonnes of LNG annually that would last for 25 years early this month.

On the same day, China National Offshore Oil Corporation, the country's largest offshore oil company, signed an agreement with Qatargas for a long-term supply of LNG of 2 million tonnes per annum.

China's thirst for clean energy boosted the demand for natural gas. Its first major LNG terminal was put into operation Shenzhen city of Guangdong Province in 2006. Another LNG terminal in Fujian province is expected to put into use in the second half of this year.

(Xinhua News Agency April 19, 2008)