ENN and Energy Transfer Sign 20-Year LNG Sale and Purchase Agreements for Lake Charles LNG
On March 29, Energy Transfer LP (NYSE: ET) and ENN Natural Gas (ENN NG 600803.SH), ENN Energy Holdings Limited (ENN Energy 2688.HK) announced that ENN Natural Gas and ENN Energy have entered into LNG Sale and Purchase Agreements with Energy Transfer LNG Export, LLC (ET LNG), a subsidiary of Energy Transfer LP, related to its Lake Charles LNG project.
Under the two SPAs, ET LNG is expected to supply 1.8 million tonnes LNG to ENN NG, and 0.9 million tonnes LNG to ENN Energy per annum on a free-on-board (FOB) basis. The purchase price is indexed to 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 in 2026. The SPAs will become fully effective upon the satisfaction of the conditions precedents by ET LNG, including reaching FID.
“The signing of 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 NG, Vice Chairman of the Board of Directors of ENN Energy . “It also provides our customers with better resources and services, ensure natural gas supply nationwide, and contributes the low-carbon transformation of energy structure.”
“We are very pleased to have ENN as a customer. The execution of these two SPAs represents a significant event in moving the Lake Charles LNG project towards FID. 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.” said Tom Mason, President of ET LNG. “The Lake Charles LNG project is expected to be financed primarily through funding from infrastructure funds and strategic partners, with Lake Charles LNG retaining an equity stake and operatorship of the liquefaction facility.”
Energy Transfer is one of the largest and most diversified midstream energy companies in North America, with a strategic footprint in all of the major U.S. production basins. The core operations include complementary natural gas midstream, intrastate and interstate transportation and storage assets; crude oil, natural gas liquids (NGL) and refined product transportation and terminalling assets; and NGL fractionation. The company owns and operates approximately 120,000 miles of pipelines and associated energy infrastructure across 41 states transporting the oil and gas products energy infrastructure, moving approximately 30% of oil and gas in the United States.
Lake Charles LNG will be constructed on the existing brownfield 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. These pipelines allow access to multiple natural gas producing basins, including the Haynesville, the Permian and the Marcellus.
ENN NG has annual LNG distribution capacity over 10 bcm, runs the first large-scale private LNG terminal in China -- Zhoushan LNG Terminal, business layout covers the entire natural gas value chain, including distribution, trading, storage and transportation, production and engineering. Relying on industry best practice, ENN NG has built an intelligent operation platform for natural gas industry – GreatGas.cn It accelerates the aggregation of demand, resources, reserves, and delivery ecology of the natural gas industry, innovates and develops digital intelligence services, promotes the digital intelligence upgrade of the natural gas industry. In 2021, ENN NG’s total natural gas sales volume was 37.2 bcm, accounting approximately 10% of China’s total natural gas consumption.
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