Representatives from both companies pose for photographs after signing the agreement, witnessed by Presidential Office consultant Shih Yen-shiang, left, Jan. 17. (Photo/CNA)
China is expected to start sending liquefied natural gas (LNG) to Taiwan's outlying Kinmen county in early 2015 under an agreement signed Friday, making LNG the second natural resource after water to be provided to the island chain by China.
Under the cooperation framework agreement signed in Kinmen, the Fujian subsidiary of the state-run China National Offshore Oil Corporation (CNOOC Group) will ship LNG to a depot in Kinmen, where it will be gasified and distributed initially to industrial companies, including the county's cash cow Kinmen Kaoliang Liquor.
At a later stage, a supply of up to 100,000 tonnes of LNG per year will be provided to power plants and households.
The agreement was signed between the CNOOC Group subsidiary and Taiwan's Shinfox, a Taipei-based power management company that belongs to Taiwanese tycoon Terry Gou's Hon Hai Precision Industry Group.
Shen Shu-hung, minister of the Environmental Protection Administration, said the cooperation is helpful to Taiwan's efforts in making Kinmen a tourism-focused low-carbon county. Shen was in Kinmen to witness the signing of the agreement.
Although it is a type of fossil fuel, LNG is relatively low cost and less polluting, producing about 20% less carbon dioxide than coal or oil.
Kinmen will also be supplied with water from Fujian starting next year. Fujian is the nearest Chinese province to the Kinmen Islands, located about 2 kilometers from them.
The Kinmen county government expects a formal contract will be signed with China in mid-2014, with the pipeline to be completed two years later, said county magistrate Li Wo-shi recently.
The county has a population of over 120,000 and is located closer to mainland China than to mainland Taiwan.