China to provide LNG to Taiwan's island county

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 its former adversary.

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, Inc.

At a later stage, a supply of up to 100,000 tons of LNG per year will be provided to power plants and households.

The agreement was signed between CNOOC Group's subsidiary and Taiwan's Shinfox Co., Ltd., a Taipei-based power management company that belongs to Taiwanese tycoon Terry Gou's Foxconn Group.

Shen Shu-hung, minister of the Environmental Protection Administration, said the cooperation is helpful to Taiwan's efforts in making Kinmen a low-carbon county featuring tourism. 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 percent less carbon dioxide than coal or fuel oil.

In addition to LNG, Kinmen will also get water from Fujian starting next year. Fujian is the nearest Chinese province to the Kinmen Islands, located about 2 kilometers away.

The Kinmen County government expects a formal contract will be signed with the Chinese side 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.