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China National Offshore Oil Corp. said Wednesday its planned liquefied natural gas terminal in the eastern province of Zhejiang has received approval from the National Development and Reform Commission, the country's top economic planner.

Zhejiang - which will be the company's fourth LNG terminal - is expected to start operations in 2012 with a designed annual receiving capacity of 3 million metric tons in the first phase, Cnooc said on its Web site.

The CNY7 billion ($1.02 billion) first phase, comprising three 160,000-cubic-meter storage tanks, will be followed by a second phase with a designed annual receiving capacity of 6 million tons.

A 38.7-kilometer gas pipeline with first-phase transmission capacity of 4.2 billion cubic meters will be built to deliver gas from the terminal to downstream users, the company said. Capacity will be expanded to 8.4 billion cubic meters in a second phase.

Cnooc, a forerunner in the nation's LNG industry, already has two LNG receiving terminals in operation, one each in Guangdong and Fujian provinces.

A third terminal in Shanghai is scheduled to come online before the year-end, following a major explosion in February.

The company has signed several long-term LNG supply deals to feed the terminals and the robust growth expected in the country's demand for gas, particularly on the affluent east coast.

Qatar will start to supply up to 2 million tons a year of gas during the second half of the year, Cnooc President Fu Chengyu said recently.

The company also signed last month an agreement with BG Group PLC (BG.LN) to buy 3.6 million tons a year from Australia's Gladstone project for 20 years.

Cnooc is the parent of the Hong Kong-listed Cnooc Ltd. (CEO).

-Jing Yang contributed to this story, Dow Jones Newswires; (8621) 6120 1200; jing.yang@dowjones.com