Origin Signs Preliminary Agreement to Supply LNG to China's ENN

Origin Energy Limited Tuesday announced that it has signed a non-binding heads of agreement with China's ENN LNG Trading Company Limited for the supply of 500,000 tons of LNG per year for a period of five years.

By mutual agreement, the parties have the ability to extend the supply period by an additional five years.

A binding agreement is expected to be executed during the second half of calendar year 2016. Deliveries of LNG under the agreement would be expected to begin in calendar year 2018 or 2019 after completion of ENN’s Zhoushan receiving terminal in Zhejiang province, China, Origin said in a statement.

Origin has flexibility under the heads of agreement to supply ENN from its portfolio interests, optimised with third party purchases where market conditions create an opportunity to lower overall cost of supply.

ENN LNG Trading Company Limited is a subsidiary of ENN Energy Holdings Ltd, one of the largest natural gas distributors in China. Last month, ENN signed an agreement with France’s Total for delivery of 0.5 million tons per year of LNG for a period of 10 years. The deliveries will be sourced from Total’s global LNG portfolio and are expected to begin in 2018.