OREANDA-NEWS. August 22, 2012. Anhui Province Guowan LNG Co. Ltd. has made a preliminary decision to build a gas liquefaction plant and liquefied natural gas (LNG) refilling stations in Anhui’s capital of Hefei, local media reported.

The RMB 1 billion (USD 157.19 million) project will be located in Hefei’s Feidong County, according to a report by the Xin’an Evening Post.

A consortium of domestic energy firms established Guowan in January as a joint venture (JV) to develop LNG and coal-to-gas projects. China Energy Reserve and Chemical Group Co. Ltd. holds a 48 percent interest in the JV, while state-owned Anhui Province Energy Group Co. Ltd. owns 45 percent directly and another seven percent through its subsidiary, Anhui Province Wenergy Co. Ltd.

The proposed project comes after Kunlun Energy Co. Ltd. inked a cooperation agreement with the Hefei city government in May to jointly promote the use of cleaner-burning LNG as a transportation fuel.

The agreement also calls for Kunlun, the listed gas distribution arm of China National Petroleum Corp. (CNPC), to build a five million cubic meter per day liquefaction plant in Hefei, according to the report.

Hefei is projected to have 20,000 vehicles powered by LNG by the end of 2015, rising to 50,000 by 2020, according to the cooperation agreement.

Anhui Province Energy Group also signed a strategic cooperation agreement last week with the provincial transportation department to spur use of LNG.

The Anhui branch of the National Energy Administration is drafting the province’s LNG utilization and development plan, which will cover processing, storage, and vehicular refueling, a source with the local NEA branch told Interfax on Tuesday. The plan is expected to be published by the end of this year, the source added.

Anhui is landlocked and therefore secures LNG from neighboring coastal provinces such as Jiangsu where CNPC operates a receiving terminal in Rudong County, the source said.

Hefei began receiving offtake from CNPC’s first West-East Gas Pipeline in 2003. The city linked up to China Petrochemical Corp.’s Sichuan-Shanghai Gas Pipeline in October last year, providing abundant supplies to support development of the LNG vehicle market.