European oil company Total has agreed to supply 500,000 tonnes a year of LNG for a decade to China's privately-run ENN Group, the latest in a string of deals by Chinese firms to stock up on the fuel.
Supplies of the super-chilled natural gas will start in 2018 upon completion of ENN's planned receiving facility near the eastern coastal city of Zhoushan, Total said on Feb. 4 in a statement on its website.
Beijing is freeing up the nation's LNG trade as part of broad reforms that allow private companies to invest in oil and gas exploration as well as pipelines and tank farms, and to import and export.
The aim is to help secure supplies while boosting competition and efficiency in an energy sector long dominated by state firms.
ENN Group, the parent company of Hong Kong-listed ENN Energy Holdings, signed a preliminary deal last month to buy a further 500,000 tonnes of LNG a year over 10 years from Chevron Corp's giant Gorgon project in Australia.
Peer Huadian Green Energy Co is also considering buying 1 million tonnes of the fuel from Chevron, from 2020 to 2030.
The delivery window for all three deals in the 2020s is timed to coincide with an expected uptick in Chinese gas consumption, analysts say.
With multi-billion dollar investments in major LNG export plants now coming to fruition, Sinopec, PetroChina and CNOOC face having to juggle large supply commitments as domestic demand sours, forcing them to consider unloading supply onto already saturated global spot markets.
Recommended Reading
Mexico Presidential Hopeful Sheinbaum Emphasizes Energy Sovereignty
2024-04-24 - Claudia Sheinbaum, vying to becoming Mexico’s next president this summer, says she isn’t in favor of an absolute privatization of the energy sector but she isn’t against private investments either.
US Decision on Venezuelan License to Dictate Production Flow
2024-04-05 - The outlook for Venezuela’s oil industry appears uncertain, Rystad Energy said April 4 in a research report, as a license issued by the U.S. Office of Assets Control (OFAC) is set to expire on April 18.
US Orders Most Companies to Wind Down Operations in Venezuela by May
2024-04-17 - The U.S. Office of Foreign Assets Control issued a new license related to Venezuela that gives companies until the end of May to wind down operations following a lack of progress on national elections.
Venture Global Gets FERC Nod to Process Gas for LNG
2024-04-23 - Venture Global’s massive export terminal will change natural gas flows across the Gulf of Mexico but its Plaquemines LNG export terminal may still be years away from delivering LNG to long-term customers.
New BOEM Regulations Raise Industry Decommissioning Obligations by $6.9B
2024-04-15 - Under new regulations, the Bureau of Ocean Energy Management estimates the oil and gas industry will be required to provide an additional $6.9 billion in new financial assurances to cover industry decommissioning costs.