Energy Transfer Sign 20-Year LNG Sale and Purchase Deal with China’s ENN

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Energy Transfer Sign 20-Year LNG Sale and Purchase Deal with China’s ENN

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Office building of the ENN Group (© Shutterstock/junrong)
Office building of the ENN Group (© Shutterstock/junrong)

Energy companies ENN Energy Holdings Limited, ENN Natural Gas, and Energy Transfer LP announced on Tuesday, March 29, 2022, that ENN Energy and ENN NG have signed an LNG sale and purchase agreements with Energy Transfer LNG.

Export LLC, Energy Transfer LP's subsidiary, relating to its Lake Charles LNG project. Under the agreement, ET LNG will deliver 1.8 million tons of LNG to ENN NG per annum and 0.9 million tons of LNG to ENN energy on a free-on-board basis.

The two projects will last 20 years, with the first deliveries commencing as early as 2026. The LNG price is based on the Henry Hub benchmark alongside a fixed liquefaction charge, and the SPAs will start operating fully after reaching FID and satisfying other conditions set by the ET LNG.

According to ENN NG president Zheng Hongtao, the signing of the long-term SPAs will help boost ENN LNG's resources and enrich the natural gas supply capacity to cater to the rising demand for gas.

The SPAs also provide consumers with better services and resources that ensure sufficient gas supply in the nation contributing to low carbon transformation.

Tom Mason, president of ET LNG, expressed their gratitude for serving ENN, saying that the execution of the two SPAs displays a bold step in the journey of taking the Lake Charles LNG project towards FID.

"We are experiencing strong demand for long-term offtake contracts for Lake Charles LNG," said Mason, adding that the company expects to take a positive FID by the end of the year. Lake Charles LNG project will be financed mainly through infrastructure funds, and the company will keep operatorship and an equity stake in the project.

Energy Transfer is among the top energy companies in North America and has a good establishment in major U.S production basins. The company owns about 120,000 miles of pipelines and other infrastructure associated with energy that transports about 30% of the natural gas and oil consumed in the United States.

Lake Charles LNG project will be built on a brownfield regasification facility and will benefit from existing LNG infrastructure, two deepwater berths, and four LNG storage tanks.

Annually, ENN NG distributes over 10 bcm of LNG and operates the first private large-scale terminal in China, Zhoushan LNG Terminal. ENN NG covers an outspread natural gas market, including trading, distribution, transportation, storage, engineering, and production.

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