BEIJING/SHANGHAI, June 17 (Reuters) - China plans to build a pilot small-scale nuclear reactor that could replace coal or gas to heat towns and cities in its colder northern regions, an official with the state-owned developer in charge of the project said on Monday.

The small heating reactor is planned for the city of Jiamusi in northeastern Heilongjiang province, one of two proposed units with a combined capacity of 400 megawatts, Wang Xujia, a senior engineer with the State Power Investment Corp., said on the sidelines of an industry conference.

“The project is still under central government review for approval,” Wang told Reuters, adding that the developer aimed to put the project into operation by 2024.

China has been exploring the use of small nuclear reactors -- less than a fifth of the size of a standard reactor -- as alternative heating systems in smog-prone northern regions. The state provides heating throughout northern China from November to March, using predominantly coal- or gas-fired boilers.

State-owned China National Nuclear Corp (CNNC) has already conducted trial runs for a “district heating reactor” (DHR) design, which it says can supply heat to 200,000 urban households.

The DHR model consists of a reactor core immersed in a water-filled tank. It is estimated to require investment of 1.5 billion yuan ($217 million) and take three years to build, making it cheaper and quicker to construct than conventional reactors.

However, while the various designs will use only a fraction of the radioactive material of a conventional nuclear plant, officials acknowledge the biggest challenge is convincing the public the reactors are safe and reliable.

“The planned project in Jiamusi will be located in a remote area of the city which undermines its economic efficiency, but since it is just a demonstration project we just want to complete one first and show it to the public,” Wang said.

China aims to raise total nuclear capacity to 58 gigawatts by the end of next year, but it has not launched any new conventional reactors in more than three years.

After Japan’s Fukushima accident in 2011, China conducted a root-and-branch safety review and decided it would only use the most advanced “third generation” technology for any new projects.

However, those technologies - including Westinghouse’s AP1000 and the Areva-developed EPR - have proved to be expensive, complex and prone to long construction delays.

In a bid to broaden its options, the country is developing smaller units and plans to launch its first “small modular reactor” (SMR) on the island province of Hainan at the end of this year.

China also plans to launch floating nuclear reactors with the aim of developing a fleet of ship-mounted nuclear generators that could be deployed on islands in South East Asia, Song Danrong, a reactor designer at CNNC, told Monday's conference. (reut.rs/2WOCGLL) ($1 = 6.9237 yuan) (Reporting by Muyu Xu in BEIJING and David Stanway in SHANGHAI; editing by Richard Pullin)