China's shipbuilding industry is stepping into a new era with its first liquefied natural gas (LNG) shipbuilding contract signed Wednesday in Beijing.

"The contract announced that China will start to construct its first LNG ship, filling a blank in its shipbuilding history," Xu Dingming, an official from the National Development and Reform Commission was quoted as saying in Thursday's China Daily.

Hudong-Zhonghua shipbuilding (Group) Co Ltd, a subsidiary of China State Shipbuilding Corp (CSSC), is to build three LNG vessels with a capacity of 147,200 cubic meters for the LNG project in southern Guangdong province.

"Building of this first LNG vessel implies that China's shipbuilding industry has entered a higher level and it will make the industry more competitive in the world's market," said Gu Baolong, chairman of Hudong-Zhonghua.

The project, which is expected to go into operation in mid-2006, will import over 3 million tons of LNG from Australia annually to supply the energy-starved region.

The first two LNG vessels, with a total investment of 400 million US dollars, will be delivered in October 2007 and in early 2008 respectively, the third will be delivered later.

Each ship will be able to deliver about 1.42 million tons of LNG a year from Withnell Bay in Australia to Dapeneg Bay in Guangdong.

Shipbuilder Hudong-Zhonghua began its study on LNG ship construction in 1999. To date, 90 percent of the ships' design and 80 percent of the equipment order have been completed.