China's JOVO Group Signs LNG Deal with SCT&E LNG

China’s private sector entity JOVO Group has signed long term LNG offtake agreement with SCT&E LNG.

The deal, signed on May 13 in New York, provides for long-term offtake of LNG from the future SCT&E LNG export terminal to be built on Monkey Island in Cameron Parish, Louisiana. The agreement also paves way for a potential equity investment into the SCT&E LNG facility by the JOVO Group.

"We evaluated multiple projects to supply LNG to our receiving terminal and selected the SCT&E LNG project,” Zhang Jianguo, Chairman of the JOVO Group, stated. No further details about the deal was provided. 

The JOVO Group currently imports LNG and has plans to expand its LNG import capabilities to further leverage the natural gas distribution network in Southern China, primarily Guandong province.

Guandong province has one of the highest capacities of coal-burning power, and Chinese leadership is now looking to curb its coal consumption by adopting clean burning energy alternatives, such as natural gas in the form of LNG.

The agreement between represents a positive step forward for the region in meeting its country's national air quality standards, SCT&E LNG said on Tuesday.

The SCT&E LNG plan is to liquefy approximately 1.60 billion cubic feet (bcf) per day of natural gas to create approximately 12 million tons per annum (mtpa) of LNG. Shipments are expected to begin in 2022.