Guangdong will be the receival point for the LNG from the North West Shelf Venture's 25 year contract, signed last year.

Saipem did confirm it has made a bid but that a decision on the contract was not expected in the near future.

However, reports in the Shanghai Daily said the contract was a done deal with CNOOC taking a one-third stake in the terminal and control of the LNG project, BP with a 30% stake and the rest being held by a group of Chinese mainland and Hong Kong companies.

The terminal will be China's first liquefied natural gas plant and is expected to receive, store and distribute more than 3 million metric tons of the fuel a year starting on June 1, 2006.

CNOOC has also proposed a second LNG terminal in southern Fujian Province.