LNG

Novatek, the Russian energy company and developer of the Arctic LNG II project to double up on the existing Yamal LNG plant, said it was still on track for the first Train to come on stream by year-end 2023 and Japan and China would be key customers.

Chinese liquefied natural gas imports in August 2022 to its network of 22 regasification terminals tumbled by 29 percent because of a mixed economic recovery, high spot prices and more pipeline natural gas imports.

Energy Transfer LP, the owner of pipeline and other assets in the Permian Basin and Haynesville Shale as well as the Cushing crude oil delivery system, has signed an LNG sale and purchase agreement (SPA) with global commodities firm Gunvor and its third in the past two months for its Lake Charles LNG export project in Louisiana.

Energy Transfer LP, the owner of assets in the Permian Basin and Haynesville Shale as well as the Cushing crude oil delivery system, has signed two LNG sale and purchase agreements with ENN Group for its almost forgotten Lake Charles LNG export project in Louisiana.

Under the two SPAs, Energy Transfer is expected to supply 1.8 million tonnes of LNG to ENN's natural gas subsidiary and 900,000 tonnes of LNG to the ENN Energy unit per annum on a free-on-board (FOB) basis.

Energy Transfer said the purchase price was indexed to the Henry Hub benchmark plus a fixed liquefaction charge.

Both SPAs are for a term of 20 years and first deliveries are expected to commence as early as 2026.

China’s ENN has an annual LNG distribution capacity of over 10 billion cubic metres of natural gas and runs the first large-scale private LNG terminal in China, the Zhoushan LNG facility in eastern Zheijang province south of Shanghai.

The SPAs will become fully effective upon the satisfaction of the conditions precedent by Energy Transfer’s plan and final investment decision to transform the existing Lake Charles LNG import terminal into an export plant.

Almost forgotten

The Lake Charles LNG import terminal once had BG Group of the UK as a main customer. Shell then become a terminal partner before later withdrawing from the export plant joint venture.

The Federal Energy Regulatory Commission has issued permits for the Lake Charles transformation and to produce 16.5 million tonnes per annum of LNG.

Energy Transfer had acquired the Lake Charles terminal in mid-2011 with the takeover of Southern Union Co. for $7.9 billion.

“The signing of these long-term SPAs will further enrich ENN’s LNG resources, expand resource supply channels, and improve ENN’s natural gas supply capacity to meet the rapidly growing natural gas demand in the domestic market,” said Zheng Hongtao, President of ENN’s natural gas unit and Vice Chairman of the Board.

Tom Mason, President of Energy Transfer LNG, said the Dallas, Texas-based company was pleased to have ENN Energy onboard.

“The execution of these two SPAs represents a significant event in moving the Lake Charles LNG project towards FID,” he explained.

“We are experiencing strong demand for long-term offtake contracts for Lake Charles LNG and we are optimistic that we will be in a position to take a positive FID by year-end,” stated Mason.

“The Lake Charles LNG project is expected to be financed primarily through infrastructure funds and strategic partners, with Lake Charles LNG retaining an equity stake and operatorship of the liquefaction facility,” he added.

Lake Charles LNG will be constructed with the existing brownfield site of regasification facility and will capitalize on four existing LNG storage tanks, two deep water berths and other LNG infrastructure.

“Lake Charles LNG will also benefit from its direct connection to Energy Transfer’s existing Trunkline pipeline system that in turn provides connections to multiple intrastate and interstate pipelines,” said Energy Transfer.

“These pipelines allow access to multiple natural gas producing basins, including the Haynesville, the Permian and the Marcellus Shale,” the company declared.

ENN Group, the leading non-state energy company in China with LNG and growing city-gas assets, reported a more than 18 percent jump in first-half profits as revenues soared, boosted by increased business in LNG and in expanding retail, wholesale and industrial gas supply markets.

ENN Group, the leading non-state energy company in China with LNG and city-gas assets, reported an increase in annual revenues and profits as its reach extended to 18 more large towns and cities in 2020.

ENN Energy Holdings, the Chinese city-gas company and owner of the Zhoushan LNG import terminal in eastern Zhejiang province, said it expected to buy more spot LNG cargoes for the rest of 2020 and aims to increase pipeline and terminal capacity in domestic market restructuring.

Toshiba Corp. of Japan said it had decided to cancel a plan to dispose of its US LNG business, including volumes from the Freeport liquefaction and export plant being constructed in Texas, to the Chinese ENN group and to relaunch the bidding process.

Woodside Petroleum, the operator of two LNG export plants in Western Australia and with expansion plans, has signed a preliminary accord with the privately-run Chinese ENN Group to provide supplies over a 10-year period.

Toshiba Corp. said it was facing regulatory hold-ups in its planned off-loading of its US liquefied natural gas business in Texas to a Chinese company, including a tolling agreement for the Freeport LNG project.

The Japanese conglomerate said it was facing complications as the group also attempts to restructure its widespread business operations.

Toshiba, attempting to emerge from a crisis caused by an accounting scandal and massive losses in the nuclear business, is currently in a five-year recovery plan and is set to pay China’s ENN Group to take over a 20-year tolling agreement at the Freeport plant on Quintana Island.

The ENN Group has agreed to accept over $800 million to assume Toshiba’s commitment to the 20-year deal that would amount to 2.2 million tonnes per annum of LNG from the Freeport facility under a liquefaction tolling agreement (LTA) structure.

Under the original plan, the Toshiba-ENN transaction was expected to be completed by the end of March 2019.

Toshiba now says it is facing a delay in securing approval from the Committee on Foreign Investment in the United States, a federal agency that examines the national security implications of foreign investments.

Toshiba had hoped the losses on its LNG investment would not be carried over from the previous fiscal year to the coming business year.

The Japanese group entered the LNG market in 2013 by signing its agreement with Freeport.

ENN Group is a natural gas and LNG market participant listed in Hong Kong.

In China, ENN supplies gas in cities, operates pipelines and engages in gas trading. It is trying to diversify its supply sources by purchasing the Toshiba operations.

Toshiba now say that it hoped to complete the transfer of its interests in the LNG business before the end of April 2019 or shortly thereafter.

The Toshiba deal with ENN involves concluding a purchase and sales agreement for the transfer of all outstanding shares of Toshiba America LNG Corp. to ENN.

Toshiba is making a provision for a 93 billion yen ($838M) loss on its Freeport LNG accord and related activities.