SHANGHAI/SINGAPORE, April 5 (Reuters) - China’s independent gas distributor and terminal operator ENN Group is beefing up its global business via new supply deals for liquefied natural gas (LNG) to meet strong Chinese demand and to grow its young trading team, a company executive said.
ENN said on Friday it signed a heads of agreement (HOA) for 10 years of supply from Australia’s Woodside Petroleum, the fourth supply pact the private company has announced so far. ENN started up its first LNG import facility in China in October.
China has since 2017 become the world’s second-largest LNG buyer after Japan, with imports of the super-chilled fuel up more than 40 percent a year over each of the past two years.
Zhang Yesheng, ENN’s chief executive, told reporters at the LNG2019 conference late on Thursday that the company is set to sign for several million more tonnes of LNG a year as its new terminal is ready to handle more gas amid rising Chinese demand.
“Some of our global purchases will land in China ... We’ll also do swaps and buy and sell to boost our international trading capability,” Zhang said.
ENN’s terminal in the East China port of Zhoushan has since its start-up last October received just over 300,000 tonnes of LNG. All was sold in liquid form and delivered by tanker truck.
That’s because a pipeline linking it with the onshore gas grid is only expected to be operational this year, Zhang said.
The terminal is expected to receive a total of 780,000 tonnes for the whole of 2019, Zhang said.
That is far below a design capacity of 3 million tonnes, and the reason ENN had to resell some of its long-term cargoes in an amply-supplied spot market this past winter, traders have said.
ENN is building its Singapore-based trading desk, and early this year it hired a former top gas executive from China National Offshore Oil Corp to head its energy trading and marketing division in the island nation.
ENN, already a stakeholder in Australia’s oil and gas producer Santos, is eyeing more investments in upstream businesses, including in the United States and Russia’s Arctic region, said Zhang. He did not elaborate. (Reporting by Meng Meng in SHANGHAI and Chen Aizhu in SINGAPORE; Editing by Tom Hogue)
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