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Shenzhen to lower gas price by 10%
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Shenzhen would reduce the price of liquefied natural gas (LNG) by about 10 percent, a government official said Tuesday.

Speaking on a radio program, Li Rongqiang, director general of the city's construction bureau, described it as "stimulating news" for local residents as food prices had kept rising over the past few months.

Li said the provincial pricing authorities made the adjustment, which has been submitted to the Shenzhen Municipal Government for approval.

At present, Shenzhen Gas Group charges LNG users 3.95 yuan (US$0.53) per cubic meter.

It promises to return LNG users the amount overcharged after the final price is decided.

Shenzhen raised the price of a 15-kg liquefied petroleum gas (LPG) cylinder within the Shenzhen Special Economic Zone by 14 percent from 112 yuan (US$14.74) to 120 yuan in October while the price for pipeline LPG was increased to 18.6 yuan from 15.6 yuan, due to the upward trend in world crude oil prices.

The price reduction will enable LNG users to pay 40 percent less than LPG users each month, Li said. About 80,000 households in Shenzhen will be using LNG, which is cleaner and cheaper than LPG, by the end of this year, and the 800,000 households now using LPG will switch to LNG by the end of 2008.

The LNG price for Shenzhen will remain stable for many years to come according to the agreement signed with the Australian supplier that will keep the price stable for 25 years.

Four years ago, China and Australia signed a deal under which Australia will eventually supply 3.7 million tons of LNG to the LNG terminal in Shenzhen each year. Phase I of the project will supply Shenzhen with 1.47 million tons of LNG a year.

The price for LNG is 2.05 yuan in Beijing, 2.1 yuan in Shanghai and 3.45 yuan in Guangzhou.

(Shenzhen Daily November 29, 2007)

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