Its Yacheng reserve in China, from which the Black Point station has received natural gas via pipelines since 1996, is being depleted earlier than expected.

"The problem is we don't have enough natural gas," Brandler told Reuters on the sidelines of a press conference, adding the plant was running only at about 60 percent of its current capacity of about 2,200 MW.

"That's why we need to burn more coal ... By bringing in the terminal, we can reduce our reliance on coal by something like 10 percent (points)."

He said natural gas should account for half of its energy sourcing in Hong Kong once the terminal is built. Coal and nuclear should each provide 25 percent.

Asked about investment, CLP's commercial director, Richard Lancaster, told Reuters it would typically require HK$4 billion to HK$6.5 billion, or $400 million to $800 million, to build such a terminal, though it would depend on the site.

When completed, the Black Point plant's capacity will reach 2,500 MW, making it the largest gas-fired plant in Asia outside Japan.

Natural gas-fired plants have almost zero emissions of sulphur dioxide and about 30 percent less of nitrogen oxide -- both blamed for deteriorating air quality in Hong Kong.

CLP is pulling forward by a year its plan to construct the LNG facilities, either next to the Black Point gas-fired plant in New Territories or on an island south of Lantau island.

In further efforts to improve the air quality in Hong Kong, Brandler said the utility was investing in renewable energy, such as windpower and hydropower, which should reach 260 MW or about 5 percent of its total capacity including outside Hong Kong.

Asked about a report by the International Energy Agency, which said on Monday that the world's energy policy was not sustainable, Brandler said: