Royal Dutch Shell Plc will buy a stake in a liquefied natural gas project at Zhoushan, in eastern China’s Zhejiang province, a person familiar with the matter said Tuesday.
Zhejiang provincial authorities have approved the investment for an import terminal and related facilities at Zhoushan, but the size of the stake Shell is taking hasn’t been decided, the person said.
Shell on Tuesday confirmed its interest in Zhoushan, but declined to elaborate.
“We are very interested to explore new business opportunities in China, including Zhoushan. We have no further comments at this stage,” a Shell spokesperson said.
China is rapidly building up its LNG import capacity, in line with its efforts to diversify away from its main fuel source, coal, and is building a network of receiving terminals along its coast, while also increasing imports via pipeline.
China National Offshore Oil Corp. is among the companies building the Zhoushan terminal, which will require a total investment of about CNY7 billion ($1.1 billion) for the first phase of construction, which is due for completion this year.
China’s LNG imports rose 31% to 12.2 million tons in 2011, with its main suppliers being Qatar, Australia and Indonesia.
In November, Shell announced that it had shipped its first cargo of LNG from the Qatargas 4 project in Qatar to PetroChina Co.’s newly commissioned Rudong terminal in Jiangsu province. The Qatargas 4 project is 70%-owned by Qatar Petroleum, while Shell owns the remainder.
