CHINA'S capability in building liquefied natural gas carriers, one of the most sophisticated vessels on the high seas, has been proven with the delivery of its first LNG tanker last month.

Now, with more overseas resources being secured and LNG receiving terminals being built, experts say China needs to build more ships to safeguard transport of the clean fuel.

On April 3, China's first LNG tanker, Dapeng Sun, was delivered at a Shanghai shipyard, and the vessel sailed between Australia's North West Shelf and China's Dapeng LNG terminal in Shenzhen, Guangdong Province.

This marks progress for the domestic shipbuilding industry, although the delivery was still several months behind schedule. Shanghai-based Hudong-Zhonghua Shipbuilding (Group) Co started construction in late 2004.

"This is a really remarkable achievement for a relatively new shipbuilder to take on such a project and develop the infrastructure and skills to deliver this ship in such a short time frame," said Jim Liebertz, Pacific division president of the American Bureau of Shipping, at the delivery.

Dapeng Sun is the first of five ships that are jointly classed by the ABS and China Classification Society. Four will be delivered to Dapeng LNG terminal over the next two years to replace foreign-flagged ships, while the remaining two are designated for the LNG terminal in Fujian Province.

Hudong-Zhonghua has support from Norwegian shipbuilder Aker Yards and the technology of France's Gaztransport & Technigaz while building the LNG tankers.

According to Xiao Hongxing, chief engineer of Hudong-Zhonghua, the company can now produce LNG carriers in large amounts. "In terms of building the first LNG tanker, China is losing to no one."

Until now, only yards in South Korea, Japan and some European nations were capable of building the special-purpose tankers.

"Its build period of some 40 months is of course far longer than will be necessary to rival the Koreans and Japanese for future LNG orders, but the fact remains that China has delivered," said John Stansfeld, director of Lloyd's Register Asia, which inspects and certifies vessels.

LNG, produced by chilling and compressing natural gas to only one-600th of its original volume for sea transport, is set to play a key role in China's energy sector, which relies heavily on smog-producing coal.

Upon arrival, LNG is decompressed to supply households, power stations and factories.

China National Offshore Oil Corp, PetroChina Co and China Petroleum & Chemical Corp (Sinopec) have planned more than a dozen LNG terminals along the coast.

Guangdong's Dapeng terminal, China's pioneer, received its first shipments in June 2006, but the preparation started almost a decade ago.

In early 1999, China Ocean Shipping (Group) Co and China Merchants Group set up an office to study transport for the project. The two companies incorporated China LNG Shipping (Holdings) Ltd, or CLNG, in 2004 in Hong Kong to focus on LNG transport. CLNG is the majority investor in the nation's first five LNG vessels.

The company also plans to build LNG tankers for other terminals, including one in Shanghai now under construction.

The government has a bidding system for LNG transport and vessel construction. It wants China to play a major role in these fields, although foreign participation is necessary, according to Hu Weiping, the oil and gas director of the energy bureau under the National Development and Reform Commission. This is to ensure transport costs are kept down and secure national energy resources.

China has adopted a mode of diversified ship investment and management for its LNG fleet development.

For example, Dapeng Sun was co-invested by CLNG with a 51-percent stake, with a group of other domestic and international companies including BHP Billiton Petroleum (North West Shelf) Pty Ltd. And CLNG partnered seasoned BP Shipping to set up a new company, CLSICO, to operate and manage the LNG carriers invested by CLNG.

"We will continue to cooperate with foreign experienced shipyards, and we also welcome the participation of foreign experienced shipbuilding supervision teams," said Yan Weiping, managing director of CLNG.

"Still, we need more developments in homemade LNG tankers, and the big challenge is managing limited manpower and crew in the shipping industry," said Yan.