Origin Energy Ltd has signed a non-binding heads of agreement with ENN LNG Trading Co. Ltd for the supply of 500 000 tpy of LNG for a period of five years.Origin also confirmed that the parties have the ability to extend the supply period by an additional five years, and that a binding LNG Sales and Purchase Agreement (SPA) is expected to be executed during 2H16.
Deliveries of LNG under the SPA would be expected to begin in calendar year 2018 or 2019, after completion of ENN’s Zhoushan receiving terminal in Zhejiang province, China.
Under the heads of agreement, Origin has flexibility to supply ENN from its portfolio interests, optimised with third party purchases where market conditions create an opportunity to lower overall cost of supply.
As LNG and commodity markets strengthen in the future, Origin together with its partners, has the option to bring forward the development of its resource positions on Australia’s east coast. For example, the Ironbark resource is an economic source of supply for ENN when tolled through existing LNG infrastructure and can be developed at a time when it becomes the lowest cost source of supply.
Origin Chief Executive Officer, Integrated Gas, David Baldwin, said: “The heads of agreement represents a significant milestone in the relationship between Origin and ENN, and in the development of Origin’s LNG business.”
Edited from press release by Callum O'Reilly
Read the article online at: https://www.lngindustry.com/regasification/01032016/origin-and-enn-ink-lng-supply-agreement-2063/