SHANGHAI (Reuters) - China has started building its first small modular reactor (SMR) project on the island province of Hainan, the state-owned China National Nuclear Corporation (CNNC) said on Thursday, as part of the country’s efforts to diversify its nuclear sector.

The project was originally scheduled to go into construction in 2017. The company did not say when the project was likely to be completed.

The country’s first demonstration SMR at the Changjiang nuclear facility in Hainan will be used to “verify the design, manufacture, construction and operation of the technology and accumulate valuable experience in small nuclear power plants,” CNNC said in a notice.

China hopes the reactor - “Linglong One” - will eventually stand alongside its bigger third-generation “Hualong One” model as it bids to export its advanced nuclear technologies and build projects overseas.

SMRs are around a third of the size of conventional reactors and can be used in the remote countryside, shipped to islands and plugged into existing grid infrastructure. They are also expected to be used in China for urban heating and desalination projects.

The State Power Investment Corporation said last month that it was planning to build a small-scale pilot heating reactor in the northeastern city of Jiamusi, with the aim of putting it into operation by 2024.

China’s ambitious reactor-building plans have been held back by its decision to rely on larger, safer but untested “third-generation” reactor designs, which are costly and have long construction time.

The world’s first AP1000, designed by U.S.-based Westinghouse, finally went into operation at Sanmen on China’s eastern coast last year, some four years behind schedule. The world’s first EPR, designed by France’s Areva, also went into operation in China last December.

China is expected to complete its first reactor using its own domestic Hualong One technology by the end of next year, ahead of schedule.