OREANDA-NEWS. August 11, 2011. China National Offshore Oil Corp or CNOOC, the parent company of CNOOC Ltd, announced that it has kicked off construction on a liquid natural gas project, which will cost RMB 6.5 billion, in Hainan Province.

The LNG project will start production in August 2014 with an annual output capacity of 2 million tons, and the capacity is expected to reach 3 million tons in 2016.

With major facilities including two 160,000-cubic meter depots, the LNG project is designed to principally supply natural gas to Hainan Province, the Guangxi Zhuang Autonomous Region and Guangdong Province.

CNOOC, which currently operates three LNG terminals in Shanghai, Fujian Province and Shenzhen, started another two projects of this kind in Guangdong Province last year.

By 2020, China's LNG demand is estimated to reach 46 million tons per year, compared with only 9.4 million tons in 2010, sources reported.