CLP Holdings Ltd, Hong Kong's biggest power utility, will take delivery of liquefied natural gas from supplier BG Group Plc because of increased demand even as a plan to build a terminal in the city has been scrapped.

"We will continue with the BG contract," Rhonda Lam, a public relations official at CLP, said in an e-mail. CLP may receive BG's LNG cargoes in China's mainland instead, Lam said.

CLP won't pursue a plan to build a US$1-billion LNG terminal in Hong Kong with Exxon Mobil Corp after the city's government secured energy supplies from the mainland. BG LNG Trading was to deliver 1 million metric tons a year to the proposed terminal for 20 years starting in 2013, Bloomberg News reported.

Hong Kong and the mainland will jointly develop an LNG terminal in nearby Shenzhen on the mainland as one of three gas supply options for the territory, according to a Memorandum of Understanding signed last month. CLP projects its annual gas usage will rise to 3.4 billion cubic meters in 2013, the utility said in a statement last Friday.

China National Offshore Oil Corp, the nation's largest offshore oil producer, will also supply gas to the city for an additional 20 years from its Hainan fields, Hong Kong's Chief Executive Donald Tsang said on August 28. China National Petroleum Corp will consider supplying gas to Hong Kong via the country's second West-East pipeline.

CLP, which needs LNG in addition to the gas it may receive from the mainland, "stands ready to explore all possible options for sourcing new gas supplies, including LNG receiving terminal construction in the mainland," the utility said.