Hong Kong LNG plans open for public review

HONG KONG, December 27– Advanced plans for a new liquefied natural gas (LNG) recieveing terminal in Hong Kong are now available for public consultation, following a government review of the environmental impact assesment (EIA) document submitted by developer Castle Peak Power Company (CAPCO).
Two sites in Hong Kong are proposed, at CAPCO’s Black Point Power Station in the western New Territories; and on South Soko Island, south of Lantau Island.

CAPCO’s preferred site is South Soko – the company says a terminal here can be completed 12-16 months sooner than at Black Point, and will require less land reclamation. The proposed route for LNG tankers’ approach to Hong Kong is also safer, it says.

For CAPCO, owned by Hong Kong utility CLP Power (40%) and ExxonMobil (60%), the clock is ticking fast. The Yancheng gas field supplying its Black Point power plant will be depleted early next decade and without substitute supplies, CLP will fail to meet its 2010 emissions targets.

Other gas supply options, including new and existing mainland LNG terminals and local South China Sea gas fields have been ruled out as expensive, insecure and tardy.

“There must be a degree of certainty to the arrival of a replacement gas supply by 2011,” says CAPCO in its EIA executive summary. “Of the five options evaluated, the alternative that offers the highest degree of certainty for a replacement gas supply within this timeframe is to import LNG via a new terminal in Hong Kong. Once an Environmental Permit is obtained which is anticipated for early 2007… CAPCO will be able to enter into a long term LNG supply commitment. CAPCO cannot commit to buy and no seller will commit to sell LNG to CAPCO if the availability of the Hong Kong terminal in 2011 is in doubt.”

Both the proposed Black Point and South Soko terminals would feature handling LNG tankers up to 215,000m3 and three full containment cryogenic LNG tanks, with a capacity of up to 180,000m3 each.

Environmental group WWF Hong Kong criticsed CLP Power for indicating its preference for the South Soko site before releasing its EIA, and for failing to “fully consider other viable site options for its LNG terminal.”

However, CAPCO says 29 sites in Hong Kong were considered when its gas supply studies began in 2003.

“We have gone through a very thorough and comprehensive site selection process. A full range of environmental issues – including marine ecology, terrestrial ecology, water quality, waste management, and cultural heritage – were carefully studied before concluding that locating the LNG receiving terminal in South Soko will provide the best benefit to Hong Kong,” said Richard Lancaster, commercial director of CLP Power Hong Kong. “We hope that our recommendation of the South Soko site and the thoroughness of our report will facilitate stakeholder evaluation of the project,” said Lancaster.

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