SHANGHAI (Reuters) - China’s first offshore nuclear reactor is set to be completed soon, engineers involved in the project said, bolstering Beijing’s maritime ambitions and stoking concerns about the potential use of atomic power in disputed island territories.

Beijing hopes offshore reactors will not only help win new markets, but also support state ambitions to become a “strong maritime power” by providing reliable electricity to oil and gas rigs as well as remote South China Sea islands.

Zhang Nailiang, engineer with the China Shipbuilding Industry Corporation (CSIC), said the technology was “mature” and the first demonstration project would be deployed soon at drilling platforms in northern China’s Bohai Sea.

“We are confident we should be able to get it finished very soon,” he told Reuters at an industry meeting this month. He declined to give an exact date, saying only that it would be ready well before 2020.

The demonstration project is being developed by a research team established by CSIC, China National Offshore Oil Corporation (CNOOC) and two reactor builders, China National Nuclear Corporation (CNNC) and China General Nuclear Power (CGN).

The direct use of military technology has aided progress, Zhang said, noting that other projects - including one launched by CNOOC and CGN last year - are still at the testing stage.

China has urged nuclear firms to develop technologies that will help boost domestic capacity and win projects abroad.

Zhang said floating reactors also served a wider political goal to strengthen China’s maritime presence, an aim reiterated by President Xi Jinping during his Communist Party Congress address this month.

“We in the nuclear and shipbuilding industries have a call of duty to construct a ‘strong maritime power’,” Zhang said in a speech.

China National Nuclear Power (CNNP), CNNC’s listed unit, launched a floating nuclear power subsidiary in August and also said the technology would help China become “a strong maritime power”.

Though CNNP did not mention the South China Sea, CGN and CNOOC’s rival project will be deployed in the region, which includes islands and reefs claimed by the Philippines, Brunei, Malaysia, Taiwan and Vietnam as well as China.

Experts warn offshore reactors could raise safety and security questions.

“The problem is the remoteness raises all kinds of questions about security, safety, economics and logistics,” said Mark Hibbs, senior fellow of the Nuclear Policy Program at the Carnegie Endowment for International Peace.

Offshore nuclear power could lead to the militarization of disputed waters, with China arguing “they have to beef up their presence” in order defend the reactors, Hibbs said.

“The big picture is that the Chinese see nuclear energy as a very strategic technology and as something that China will deploy to its strategic benefit,” he added.