A worker walks past the logo of China National Offshore Oil Corporation (CNOOC) at its Nanshan liquefied natural gas (LNG) terminal in Hainan province, China, September 24, 2019. Reuters-Yonhap

China is strengthening gas storage capacity in Hainan as part of an expanding energy security strategy aimed at reducing exposure to external supply shocks, including disruptions through the Strait of Hormuz during the US-Israeli war in Iran.

Against this backdrop, the second phase of a major liquefied natural gas (LNG) terminal in the southern island province has reached a crucial milestone, with construction nearly 50 per cent complete and full completion expected by 2027, state broadcaster CCTV reported on Tuesday.

The current phase comprises three 220,000-cubic-meter (7.7 million cubic feet) LNG storage tanks. Engineers recently oversaw the lifting of an 821-ton roof onto one of the structures at a height of 43 meters (141 feet), according to the report. Aerial footage showed it was the first of three tanks in the second phase to have its roof installed.

The terminal's first phase, which involved installing two 160,000-cubic-meter (5.65 million cubic feet) tanks, is already operational.

Located in Danzhou, a northwestern coastal city in Hainan, the facility holds the distinction of being China's first bonded LNG terminal. Once finished, it is expected to "significantly enhance natural gas emergency peak-shaving capacity and supply security for the entire Hainan island and the coastal regions of South China," the report said.

Wang Ning, a local LNG project manager at the state-owned China Oil and Gas Pipeline Network Corporation, also known as PipeChina, said the project was strategically important for both Hainan and the wider region.

"The success of lifting this roof not only accelerates subsequent tank construction but also lays the foundation for the Hainan Free Trade Port to become an Asean [Association of Southeast Asian Nations] regional LNG supply centre and an Asia-Pacific storage and transshipment hub in the future," Wang said.

The project comes as China accelerates the development of oil and gas infrastructure nationwide. Since the start of the year, Beijing has fast-tracked interprovincial pipelines, storage facilities, peak-shaving hubs and strategic energy corridors, according to CCTV.

These efforts are aimed at strengthening a "national integrated network" for oil and gas distribution, the report added.

Source: Korea Times News