By Chen Aizhu

SINGAPORE, Sept 26 (Reuters) - China's Guangdong Energy

Group is expected to start commercial operation of a new LNG

receiving terminal in south China next week which U.S. major

ExxonMobil ( XOM ) has agreed to use under a 20-year agreement, two

industry sources told Reuters on Thursday.

The $1 billion terminal in Huizhou in Guangdong province can

handle 4 million metric tons a year of liquefied natural gas

(LNG). It received its first cargo from the United Arab Emirates

last month in a trial operation, the sources said.

ExxonMobil ( XOM ) agreed last December to use the terminal to

handle 1.8 million tons of the LNG per year under an 20-year

deal with Guangdong Energy, a utility and gas importer backed by

the provincial government, said one of the sources who has

direct knowledge of the matter.

The sources declined to be identified as they are not

authorised to speak to media.

An ExxonMobil China representative confirmed the agreement

for terminal access, which the company had not previously

announced.

The two sources said the agreement does not include an

equity stake for Exxon.

Last year, Reuters reported that ExxonMobil ( XOM ) was in

discussions to invest in the LNG business in Guangdong province.

Exxon will use the terminal partly to supply gas to its

fully-owned multi-billion-dollar chemical complex in Huizhou

which is now in an advanced stage of construction and expected

to start operation in 2025, the sources added.

Guangdong Energy began building the terminal around

mid-2021. It includes three 200,000 cubic metre storage tanks

and one berth capable to receive 266,000-cubic metre LNG

tankers.

Guangdong, China's largest gas consumer by province, has

built LNG receiving facilities with combined an annual capacity

of 32.6 million tons, according to Chinese consultancy Sublime

China Information.