Plans to construct a U.S. floating liquefied natural gas (FLNG) vessel in China, which may also provide funding and buy part of its output, are moving ahead despite trade tension between the countries, an executive at one of the partners said on Thursday.

The Delfin LNG project will be the first of its kind for the United States, which has only onshore liquefaction facilities, and will produce up to 13 million metric tonnes per annum (mtpa) of LNG for export.

Delfin could export to China, the world's second-largest LNG buyer, but a 10 percent tariff on U.S. LNG as part of the trade conflict begun by U.S. President Donald Trump last year has served to restrict imports.

The two countries now appear close to a deal that would roll back U.S. tariffs on at least $200 billion worth of Chinese goods. Beijing would also scrap retaliatory tariffs and there would be an $18 billion purchase of LNG from Cheniere Energy , the country's top producer of the fuel.

"That is realistic. We do not believe the tariffs and trade disputes will last long," said Wouter Pastoor, chief operating officer at partner Delfin Midstream.

"Moreover, in our case we can actually create a win-win for both countries by exporting a large amount of U.S. LNG."

Delfin has signed a memorandum of understanding to supply 3 million tonnes of LNG per year to China Gas Holdings Co (0384.HK), one of China’s most active city gas distributors.

The project, which could ultimately utilize up to four FLNG vessels, is expected to have similar costs to the Hilli Episeyo FLNG vessel developed by Delfin's partner Golar LNG and has started production off Cameroon.

The Hilli vessel, converted from an ageing tanker for $1.2 billion, produced its first LNG on March 12 last year, but its sole offtaker Gazprom only exported its first cargo in May, also to China, after technical issues hampered production.

"We can also work on the financing in China; basically, we can look at a 'China Inc' deal," Pastoor said, adding that there has been strong interest from Chinese banks among others.

After reviewing yards in Asia, Delfin is now working with a Chinese shipyard on the FLNG conversion together with Black and Veatch, the designer of the top side of the vessel.

There is very strong interest from China to start converting FLNGs and strong Chinese appetite for LNG, Pastoor added.

The Delfin LNG partners are targeting a final investment decision for the project by the end of the year and the first LNG production in the second half of 2023.

(Reporting by Lefteris Karagiannopoulos Editing by Veronica Brown and David Goodman)