Construction of a 7.4-billion-yuan (US$840 million) receiving station for Guangdong's long-awaited liquefied natural gas (LNG) network project started in Shenzhen on Sunday (Dec. 28th).

Covering an area of more than 40 hectares, the station, located in Chengtoujiao by Dapeng Bay in eastern Shenzhen, has been designed to reach a production capacity of more than 3.7 million tons a year after the first phase is completed.

The project includes two large gas tanks, an LNG port and natural gas transmission pipelines. Each of the two gas tanks will have a capacity of more than 160,000 cubic meters.

A French company and an Italian firm have won the deal to build the project via public biddings.

"Construction of the receiving station indicates that the province's LNG project has formally begun," Huang Huahua, governor of Guangdong Province, said Sunday.

The gas-receiving station will be completed and start receiving gas from overseas in June of 2006.

The first phase of the project will be finished in the second half of 2006. It will be able to provide gas to the cities of Shenzhen, Guangzhou, Dongguan and Foshan in the Pearl River Delta.

The whole project will be completed in 2008. It will be able to provide gas to all major cities in the Pearl River Delta and Hong Kong.

World petroleum giant, British Petroleum (BP), has won the contract to build the LNG project while Australia has clinched the deal to export natural gas to Guangdong.

Guangdong, which can self-supply less than 10 percent of its energy it needs, will annually import more than 3 million tons of natural gas when the LNG project is fully completed.

Editor: Donald