Two private enterprises have signed an agreement to transport some 250,000 cubic meters of liquefied natural gas (LNG) daily in tanks from Northwest China's Xinjiang Uygur Autonomous Region to the southern coastal city starting in June.

The project will save tens of millions of yuan a year for power plants and some industrial companies in the city's suburban Bao'an District, which will continue to use diesel as a major source of fuel before the LNG pipelines reach the area in 2006.

Shenzhen Tianmin Ltd, a privately funded company involving LNG trade and transportation, said its partner, Xinjiang Guanghui Group Ltd, will provide 60 million cubic meters of LNG annually in the beginning.

The first phase of Guanghui's LNG project, which is located in Tuha in Xinjiang, is expected to reach a daily output of 1.5 million cubic meters, or an annual production of about 500 million cubic meters.

Tianmin has invested 100 million yuan (US$12.0 million) to enable and ensure the safe transportation of 250,000 cubic meters of LNG from Xinjiang to Shenzhen - a 4,300 kilometer trek, said Wu Yihao, deputy general manager of Tianmin. He said this would be done with the use of advanced professional vehicles equipped with a container for cryogenic liquid as well as a Global Position Satellite system (GPS).

The company's annual transportation capacity will reach 300 million cubic meters, or about 820,000 cubic meters daily, by the end of this year, he added.

In 2005-06, China's first two LNG terminals are expected to be employed in Guangdong and Fujian, carrying liquefied natural gas from Australia and Indonesia.

(China Daily March 8, 2004)