Hong Kong Firms Sign LNG Deals

Maritime Activity Reports, Inc.

June 23, 2019

Hong Kong's power firms Castle Peak Power Company Limited (CAPCO) and The Hongkong Electric Co., Ltd. (HKElectric) today announced that an agreement has been entered into with Shell Eastern Trading for long-term liquefied natural gas (LNG) supply for the Hong Kong Offshore Liquefied Natural Gas Terminal.

A press release from CAPCO,  a 70:30 joint venture of CLP Power Hong Kong Limited ( and China Southern Power Grid International, said that after completion of the project, Shell will supply LNG to both CAPCO and HK Electric from its worldwide LNG portfolio.

With more than 50 years of experience in the industry, Shell is a leading independent producer and marketer of LNG with a globally diversified supply portfolio.

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."

He added: "Throughout our procurement process, we received very positive responses from LNG suppliers worldwide, and the terms achieved in the agreement reflect the keen competition among suppliers at the time.”

HK Electric Managing Director Wan Chi-tin said, “HK Electric is taking steps to substantially increase the use of natural gas for power generation, from currently over 30% of total output to around 70% by 2023, as we support the Government’s policy and targets to combat climate change and improve air quality while transforming Hong Kong into a low-carbon city. 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.”

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.


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