China is strengthening gas storage capacity in Hainan as part of an expanding energy security strategy aimed at reducing exposure to external supply shocks, including disruptions through the Strait of Hormuz during the US-Israeli war in Iran.

Against this backdrop, the second phase of a major liquefied natural gas (LNG) terminal in the southern island province has reached a crucial milestone, with construction nearly 50 per cent complete and full completion expected by 2027, state broadcaster CCTV reported on Tuesday.

The current phase comprises three 220,000-cubic-metre (7.7 million cubic feet) LNG storage tanks. Engineers recently oversaw the lifting of an 821-tonne roof onto one of the structures at a height of 43 metres (141 feet), according to the report. Aerial footage showed it was the first of three tanks in the second phase to have its roof installed.

The terminal’s first phase, which involved installing two 160,000-cubic-metre (5.65 million cubic feet) tanks, is already operational.

Located in Danzhou, a northwestern coastal city in Hainan, the facility holds the distinction of being China’s first bonded LNG terminal. Once finished, it is expected to “significantly enhance natural gas emergency peak-shaving capacity and supply security for the entire Hainan island and the coastal regions of South China,” the report said.

Wang Ning, a local LNG project manager at the state-owned China Oil and Gas Pipeline Network Corporation, also known as PipeChina, said the project was strategically important for both Hainan and the wider region.