The company wanted to invest in a regasification plant in southern Shenzhan planned by PetroChina, the country's largest oil and gas producer, CLP commercial director Richard Lancaster told the South China Morning Post.

It is also considering investing in a plant planned in Zhuhai by another energy giant, China National Offshore Oil Corp (CNOOC), he said.

The move follows the company's decision to ditch a controversial project to build an LNG plant on the Soko Islands in the southwestern waters of Hong Kong.

CLP said there was no longer the need for a plant in Hong Kong after Beijing signed a deal with the city last month to guarantee a consistent supply of natural gas and nuclear energy for the next two decades.

"The Sokos project is stopped," Lancaster told the newspaper.

"We concur with the government view that (the project) is not needed after a memorandum of understanding on energy supply to Hong Kong was signed," he said.

CLP had said the project was necessary to increase supply of clean fuel, as gas reserves in the mainland were far less than expected and would run out soon after 2011 at the current useage rate of 2.5 billion cubic metres a year.

The Sokos project was hit by concerns from environmental groups that the proposed location could damage local marine life.

For much of its energy Hong Kong relies on coal-fired power, which is one of the major contributors to greenhouse gases from within the territory.

The city has faced criticism that it is not doing enough to reduce the smog, much of which originates across the border and has raised worries it could damage the economic centre's ability to attract top international talent.

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