PetroChina Co Ltd, the listed arm of China's largest gas producer, announced on Wednesday that it would jointly develop a proposed liquefied natural gas export facility in Canada with Shell Canada Ltd, Korea Gas Corp and Mitsubishi Corp.

The proposed LNG Canada project located near Kitimat, British Columbia, will initially consist of two LNG processing units, each with the capacity to produce 6 million metric tons of LNG annually, with an option to expand the project to a total of 24 million tons per year.

According to PetroChina's statement, Shell holds a 40 percent working interest, with KOGAS, Mitsubishi and PetroChina each holding a 20 percent stake.

Development will start this year and the project is likely to become operational around 2020, pending regulatory approval and investment decisions, the statement said.

The LNG Canada project would include the design, construction and operation of a gas liquefaction plant and facilities for the storage and export of LNG.

"The plant is built to serve the Asian market," said a source at PetroChina who declined to be named.

According to the China Industrial Gas Association, China will complete the construction of 17 LNG terminals during the 12th Five-Year Plan (2011-15), with an annual capacity of 65 million tons.

The government said last year that it was hoping to double the share of natural gas in its overall energy mix to 8 percent by 2015, from nearly 4 percent at the end of 2010.

The National Development and Reform Commission is said to have submitted the blueprint for the natural gas sector under the 12th Five-Year Plan for approval to the State Council.

According to the plan, China's annual natural gas consumption will reach 260 billion cubic meters by the end of 2015.

The nation's natural gas consumption increased 20.6 percent to 129 billion cu m in 2011, accounting for 4 percent of total energy consumption.

By the end of 2015, China will have to produce 170 billion cu m of natural gas and import 90 billion cu m per year to meet domestic demand.

China produced more than 100 billion cu m of natural gas for the first time last year, with total production volume of 102.53 billion cu m.

Meanwhile, PetroChina started building the country's largest onshore gas liquefaction plant last month.

Its Tai'an plant in Shandong province will be able to produce 2.6 million cu m of gas daily and supply up to 600,000 tons of LNG annually when it becomes operational next year, according to PetroChina.