French energy and power company Engie and Shaanxi Houde Tongxing signed an investment agreement to establish an LNG joint venture in China.
The joint venture is aiming to build an LNG industrial base in the North-West region of China and to develop LNG downstream activities, Engie, which will hold 35 percent share in the JV, said in a statement issued on Friday.
Under the contract, both companies will jointly invest and construct the LNG industrial base to be located in the Yujia Industrial Park, Yulin, Shaanxi Province, China.
The natural gas will be provided by CNPC and Sinopec’s long-distance natural gas transport pipeline.
According to Engie, the project construction is divided into 2 phases: Phase I, with a capacity of 0.25 million tons of LNG per year will start its commercial operation in July, 2017, while Phase II, with a capacity of 0.5 million tons of LNG per year will be in commercial operation in February, 2018.
The total estimated investment for these two phases amounts around 1400 million RMB (about 200 million euros).
In addition, the JV will launch the study at the beginning of 2016 for the construction of LNG storage center in Yulin aiming to realize the peak shaving by LNG, Engie said.
The JV aims to sell LNG to end-users such as industrial parks and residents in the North-West region of China that are not covered with natural gas pipelines and the transportation sector (heavy trucks, service vehicles, public transport), willing to switch to LNG as fuel, Engie added.
LNG World News Staff; Image: Engie