Shenergy, a Shanghai-based power utility company, has begun building a gas-fired plant in Lingang New City to meet an increasing demand for power.

The project is valued at US $0.8bn and is expected to start operations late this year, the company said.

The Lingang gas-fired plant consists of four units with a power generation capacity of 350MW each. The first two units are planned to commence operations next year, while the next two before the peak power demand season in summer of 2011.

The company is also planning to import liquefied natural gas (LNG) from Malaysia Petronas under a long-term contract, to supply 3.03 million tons of LNG per year starting from 2009, for 25 years.

It is run by Shanghai LNG Company, which is a joint venture between Shenergy Group, the parent of Shenergy Company, and China National Offshore Oil Corporation.