XN000022-1993-06-02 — Page 33

WEDNESDAY, JUNE 2, 1993

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GOVT EXAMINES STUDY ON LNG TERMINAL

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THE ADMINISTRATION

IS EXAMINING FINDINGS OF A STUDY OF THE CONSTRUCTION OF A TERMINAL FOR THE IMPORTATION OF LIQUEFIED NATURAL GAS (LNG).

THIS WAS STATED BY THE SECRETARY FOR ECONOMIC SERVICES, MR GORDON SIU, IN A WRITTEN REPLY TO A QUESTION BY THE HON STEVEN POON KWOK-LIM IN THE LEGISLATIVE COUNCIL TODAY (WEDNESDAY).

THE STUDY, COMMISSIONED RECENTLY BY A GROUP OF COMPANIES IN THE ENERGY FIELD, HAS INDICATED THAT THE CONSTRUCTION OF SUCH A IS TECHNICALLY FEASIBLE. A NUMBER OF POSSIBLE SITES FOR THE

TERMINAL TERMINAL

HAVE ALSO BEEN IDENTIFIED.

MR SIU SAID THERE HAD BEEN NO OVERALL STUDY CONDUCTED INTO THE USE OF LNG IN HONG KONG.

BUT THE GOVERNMENT COMMISSIONED CONSULTANTS IN 1990 TO ADVISE ON THE IMPLICATIONS OF USING LNG INSTEAD OF COAL TO FUEL THE PLANNED BLACK POINT POWER STATION.

THIS STUDY INDICATED THAT THE USE OF LNG WOULD BRING CERTAIN ENVIRONMENTAL BENEFITS IN TERMS OF LOWER EMISSIONS OF AIR POLLUTANTS AND PRODUCTION OF OTHER WASTE PRODUCTS, BUT THAT CONSUMERS WOULD FACE HIGHER TARIFFS IN THE LONG TERM THAN IF COAL WERE USED.

"IN THE EVENT, THE OPTION OF USING LNG WAS NOT PURSUED BECAUSE THE DEVELOPERS OF THE STATION: THE CHINA LIGHT AND POWER COMPANY AND EXXON ENERGY WERE ABLE TO PURCHASE A SUPPLY OF PIPED NATURAL GAS FROM A FIELD IN THE SOUTH CHINA SEA OFF HAINAN ISLAND, THE SECRETARY SAID.

BEFORE ENTERING INTO THE PURCHASE AGREEMENT, THE COMPANIES WERE REQUIRED TO SATISFY THE GOVERNMENT THAT THERE WOULD BE ADEQUATE SECURITY OF SUPPLY AND THAT CONSUMERS WOULD NOT BE FACED WITH HIGHER TARIFFS THAN WOULD BE THE CASE UNDER ALTERNATIVE FUEL OPTIONS.

NO OTHER SPECIFIC PROPOSALS FOR THE IMPORTATION OF NATURAL GAS,

EITHER IN PIPED OR LIQUEFIED FORM, HAVE BEEN RECEIVED BY THE

GOVERNMENT.

MR SIU SAID THE GOVERNMENT WOULD CONSIDER ALL PROPOSALS POSITIVELY, ON A CASE BY CASE BASIS, IN THE LIGHT OF THE RELEVANT ECONOMIC, ENVIRONMENTAL AND SECURITY OF SUPPLY IMPLICATIONS.

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