China's Yantai Port Group aims to launch two jointly-owned liquefied natural gas (LNG) storage facilities by 2022 and expects government approval for them this month, two sources familiar with the matter said.
Shandong province, where the Yantai port is located, is an industrial and petrochemical hub in China. It has one quarter of the country's steel capacity and is also a big coal consuming region, though it is yet to house a gas-powered plant.
Yantai Port, which holds a 19% stake in the project, is building the two facilities, one with a 5 million tonne capacity and another able to store 6.5 million tonnes, with Yantai LNG Group.
Yantai LNG Group is jointly owned by Poly-GCL Petroleum Holding Group Ltd, Pan-Asia International Energy Distribution Center Co and Yantai Port.
Land reclamation for the project has started, one of the sources, who declined to be identified, told Reuters.
Phase 1 will cost $1.1 billion and will comprise an LNG-dedicated port area, an LNG berth able to receive up to 266,000-cubic metre LNG carriers, a 50,000 cubic-meter trans-shipment berth, and five 200,000 cubic meter storage tanks, a second official said.
It will receive 5 million metric tonnes of LNG per year and regasify 40 million cubic meters per day, he added.
A second phase, expected to launch by 2025, will comprise of two LNG berths receiving up to 266,000 cubic meter carriers, and five more 200,000 cubic meters storage tanks, expanding Yantai LNG's receiving capacity to 10 million tonnes per year.
Yantai Port Group is also investing in a separate 5 million tonne storage project at Yantai port which CNPC aims to build by 2022. Yantai will take 49% stake in that project with CNPC holding the majority share of 51%, he said.
Separately, Yantai Port will build a 300,000-tonne crude oil berth for a new petrochemical project in Yantai, the official said.
(Reporting by Muyu Xu and Shivani Singh; Editing by Alexander Smith)
