LNG

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.

Cheniere Energy, the largest US liquefied natural gas exporter from plants at Sabine Pass in Louisiana and Corpus Christi in Texas, has signed a sale and purchase agreement with ENN Group, the leading non-state energy company in China with LNG and growing city-gas assets.

The ENN LNG marketing unit based in Singapore will purchases 900,000 tonnes per annum of LNG from Cheniere Marketing on a free-on-board basis for a term of 13 years beginning in July 2022.

The purchase price for the LNG is indexed to the US benchmark Henry Hub price, plus a fixed liquefaction fee.

Acting as guarantor of the agreement will be the natural gas units in the ENN Group, which owns the Zhoushan LNG import terminal in the Zhejiang Free Trade Zone in eastern China.

“We are pleased to announce this long-term LNG contract with ENN, a major player in China’s rapidly growing natural gas market, and we look forward to a successful, long-term relationship with ENN as a customer,” said Jack Fusco, Cheniere’s President and Chief Executive.

“This SPA underscores the strength of the global LNG market, particularly in China, and highlights Cheniere’s role as a leading global supplier,’ added Fusco.

The CEO noted that the deal further advanced Cheniere’s commercial momentum in anticipation of the final investment decision expected in 2022 on expanding the Corpus Christi facility.

Wang Yusuo, Chairman of ENN Natural Gas, was embarked on the cleaner energy path with industry reforms and structural adjustment of energy consumption.

“It is expected that the two parties will seize the opportunity of this cooperation to establish a strategic relationship, to provide clients with high quality resources and services,” said Wang.

ENN, whose shares are listed in Hong Kong, said in its latest earnings that first-half revenues had increased 30 percent to the equivalent of US$6.38Bln.

ENN now has a total of 239 city-gas franchises in 20 different regions and provinces in areas such as in Beijing, Fujian, Guangdong, Shanghai and Tianjin, with a connectable population of 117 million.

Since the start of 2021, ENN has acquired more exclusive operating rights in four more city-gas projects, the Ruyang Industrial area in Henan province, Lvsigang Town in Jiangsu province, the Lantang industrial new town in Guangdong province and the industrial area of Chizhou in Anhui province.

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.

Royal Dutch Shell and the privately-owned Chinese company, GCL Oil & Natural Gas Co., have signed an agreement to explore the establishment of a joint venture based in eastern China to market and trade liquefied natural gas.

ENN Energy Holdings, the Chinese city-gas company and owner of the Zhoushan LNG import terminal in eastern Zhejiang province, reported a jump in annual profits and increased retail gas sales.

ENN Energy Holdings Chief Executive Zhang Yesheng said the company would be expanding its LNG and natural gas activities, including constructing new pipelines in eastern Zhejiang province and city-gas connections elsewhere as annual profits increased along with revenues.

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.

Sept 13 (LNGJ) – The 160,500 cubic metres capacity vessel “Sonangol Benguela” will unload a shipment on September 15 at the Tong-Yeong terminal in South Korea from the Angolan liquefaction plant at Soyo in southwest Africa. The 160,400 cubic metres capacity vessel “Cubal” is scheduled to unload a cargo from Angola on September 22 at the Yung-An terminal in Taiwan. The 155,000 cubic metres capacity vessel “British Ruby” will deliver a cargo on September 22 to the Map Ta Phut terminal in Thailand from Atlantic LNG plant in Trinidad. The 161,880 cubic metres capacity vessel “BW Pavilion Vanda” will deliver a cargo on September 18 to the South Korean Boryeong terminal, reloaded from Singapore. The 171,800 cubic metres capacity vessel “Papua” will deliver a shipment on September 21 to the Qingdao terminal, owned by Sinopec, in northeast Shandong province from Papua New Guinea. The 145,000 cubic metres capacity carrier Methane Heather Sally will deliver a shipment on September 30 to the Chinese Zhoushan terminal, operated by Enn Group, in eastern Zhejiang province, from Ras Laffan in Qatar.

China took its liquefied natural gas terminal network to 19 as two more facilities were formally brought into service in August at Zhoushan in the eastern Zhejiang province and at Dapeng New District in the southern province of Guangdong.

Australian energy company Santos, with stakes in three Asia-Pacific LNG plants that shipped 250 cargoes in 2017, said it had narrowed its annual losses, boosted LNG income and was building its strategic relationship with ENN Group of China to focus on increasing Chinese LNG demand.