Hong Kong duo ink LNG supply deal with Shell
- Project & Tenders
Hong Kong utilities, Castle Peak Power Company (CAPCO) and the Hongkong Electric (HK Electric) signed a deal with Shell Eastern Trading, for long-term LNG supply for the Hong Kong offshore LNG terminal.
After completion of the project, Shell will supply LNG to both CAPCO and HK Electric from its worldwide LNG portfolio, CLP power a company jointly owning CAPCO with China Southern Power Grid International.
CLP Power managing director T K Chiang said, “The Government has established new emissions and carbon reduction targets, among which include setting a new proportion for natural gas in the fuel mix for power generation. This fuel supply contract will enable us to access price-competitive natural gas and broaden our sources of natural gas, ensuring a reliable and stable fuel supply for Hong Kong.”
HK Electric managing director Wan Chi-tin added that the company is taking steps to increase the use of natural gas for power generation, from currently over 30 percent of total output to around 70 percent by 2023.
“With the substantial increase in gas demand by the company in the coming years, the signing of this agreement will provide HK Electric with another gas source to help secure stable, safe and reliable gas supply,” he said.
In support of the government’s policy to reduce carbon intensity and increase the proportion of natural gas used for power generation by 2020, CLP Power and HK Electric first launched a study into building an offshore LNG terminal in 2016. The terminal will enhance and diversify Hong Kong’s natural gas supply sources, and ensure a more reliable supply of fuel at competitive prices.