OREANDA-NEWS. June 20, 2014. As part of China's efforts to encourage the use of less polluting fuels, the Ministry of Finance has confirmed an extension to the rebate of value added tax (VAT) for imported liquefied natural gas.

When the VAT rebate was first introduced in 2011 it covered imports of natural gas through the Central Asian pipeline and LNG shipments through then-operating import terminals. The Government said other future projects would be approved by the Government at a later date.

Having already been extended once last year, the MOF has now confirmed a further revision to the rebate for imported gas from new LNG sources, including three newly-added projects at Tianjin and Tangshan, from October 1, 2013, and at Hainan, from July 1 this year.

The rebate is given whenever the cost of imports is higher than Chinese wholesale market price. Chinese demand for gas is expected to increase threefold by the end of 2020, to 300bn cubic meters, of which one-third is expected to be sourced from overseas.