The second phase of Shenzhen's liquefied natural gas (LNG) conversion project commenced in some housing estates in Futian and Longgang districts on Saturday, a week after the Cuihai Garden housing estate in Futian and the central district of Longgang started using LNG.

More than 4,000 homes were covered in the second phase, Saturday's Shenzhen Evening News reported, quoting officials with the Shenzhen Gas Group.

The municipal government said earlier that a total of 80,000 homes in Shenzhen will be using the cleaner, cheaper fuel by the end of this year.

At a press conference held Friday, officials with the Shenzhen Gas Group said the price of natural gas will be cheaper than that of liquefied petroleum gas (LPG). The price of natural gas per cubic meter "will definitely not exceed five yuan," the officials said. The price will not fluctuate much in the next three years, according to the officials.

However, they also revealed that the price of natural gas in Shenzhen would be expensive compared to that in Beijing and Shanghai due to the differences in the source and quality of gas, purchasing cost, construction cost and labor cost.

A home in Shenzhen will receive a subsidy of 46 yuan for a stove and 94 yuan for a water heater if it has to buy new ones suitable for LNG use during the transition period.

Residents who want to continue using existing stoves and heaters will have the parts replaced free of charge, but the equipment which has been used for more than eight years are considered too old for replacement, and the owners have been advised to buy new ones designed for LNG users.

Four years ago, China and Australia signed a deal for the annual import of 3.7 million tons of LNG with a pricing mechanism that will ensure the price is much lower than the current price on the world market.

Editor: Yan