Guangdong is ready to build the receiving station for its liquefied natural gas (LNG) project, the Shenzhen Economic Daily reported Wednesday.

Land acquisition and field clearing are underway at Chengtoujiao on Dapeng Bay in eastern Shenzhen's Longgang District. Construction will start once the feasibility study is approved.

Contracts for the project were signed in March covering the terminal joint venture, sales in the Pearl River Delta including Hong Kong, and transportation, paving the way for China's pilot LNG imports from Australia with a total investment of 30 billion yuan (US$3.6 billion).

The first phase is scheduled for operation in July 2006. Three million tons of natural gas will be imported each year until 2008 when annual imports will rise to 5 million tons after the second phase is finished.

Terminals will also be built in Shenzhen, Guangzhou, Foshan and Dongguan, connected by pipelines running 215.4 kilometers. The terminals and pipelines will be built jointly with British Petroleum, while the receiving station is contracted to the STTS Group of France and Italy.

LNG usually costs 70 percent of the price of liquefied petroleum gas.

Editor: James