China's Wuhan to invest $29 mln in gas storage facility

BEIJING, Nov 25 (Reuters) - The industrial city of Wuhan will invest 200 million yuan ($29.29 million) to build a liquefied natural gas (LNG) storage facility, in response to the gas shortages that have hit the capital of central China's Hubei province and other regions.

The decision was made on Tuesday, said a report posted on the local government's website (www.wuhan.gov.cn).

Mayor Ruan Chengfa asked local government departments to shorten approval procedures to ensure construction started before mid-February 2010.

The proposed Anshan LNG storing and regasification project would be able to supply 20 million cubic metres (mcm) of gas, or around 10 days of average consumption.

The local government hoped to bring the facility online before the peak consumption time in the summer of 2010.

Meanwhile, the city will begin studying the second phase of the project that would raise supply capacity to 40 mcm, aimed to be operational before next year's winter, the report said.

Gas demand in Wuhan was expected to rise to 770 mcm this year from 420 mcm in 2008, a separate report posted on the website said.

The National Development and Reform Commission said in a document dated Nov. 22 that the gas shortage would not be solved in the short term. However, it said a day later that the tight gas supply situation was gradually easing. [ID:nPEK298189] ($1=6.827 Yuan) (Reporting by Jim Bai and Tom Miles; Editing by Chris Lewis) ((Email: jim.bai@thomsonreuters.com; Reuters Messaging: jim.bai.reuters.com@reuters.net; + 86 10 6627 1271)) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com))