China National Offshore Oil Corporation (CNOOC) will invest 8.38 billion yuan (about 1.01 billion US dollars) in three new projects in south China's Hainan Province.

In accordance with the agreements signed on Saturday between CNOOC and Hainan Provincial Government, the three projects will be the liquefied natural gas (LNG) infrastructure in Hainan, the reorganization of the state-owned assets at the Port of Basuo, also known as Dongfang on the west coast of Hainan, and the stock right transfer in Yangpu Power Co. Ltd. of Hainan Province, sources from the Hainan provincial government said.

The LNG project will require construction of stations to receive store LNG, supporting gas-fueled power plants and pipelines encompassing the island of Hainan. The project will be built by CNOOC and Hainan Province at a cost of 7.5 billion yuan.

CNOOC Petrochemical Co. Ltd. and Basuo Port invested 304 million yuan and 115 million yuan, respectively, to form a new port company with limited responsibilities -- Basuo Port Co. Ltd.-- in a bid to turn Basuo into a large modern comprehensive port on the western coast of Hainan. Two berths of the new company, including one for dangerous chemicals will begin construction in May.

In the meantime, CNOOC Petroleum, Gas and Power Co. Ltd. will pump 580 million yuan to buy over 46 percent stake the province held in Yangpu Power Co. Ltd., increasing its prior stock ownership in the power company from 49 percent 95 percent. The remainder five percent stake is retained by the State Assets Committee of Hainan Province.

After the takeover, the Yangpu Power Co. Ltd. will use LNG in power generation instead of gas.

While urging CNOOC to intensify prospecting and supply more supply of gas, Wei Liucheng, governor of Hainan, said "I hope Hainan will become one of the important petrochemical bases in China by 2008 when CNOOC's supply of gas will exceed 5 billion cubic meters."