E.ON concludes deals to export U.S. LNG

E.ON Global Commodities said it has concluded a 20-year agreement as a foundation shipper with Gulf South Pipeline Company, for the shipment of natural gas on the to-be-built Coastal Bend Header project.

EGC will be responsible for the 20-year supply of feed gas to be purchased free-on-board by EGCSE as LNG, the company said in a statement.

Concurrently, EGC has concluded a 20-year agreement for shipping capacity of up to two LNG vessels with leading Japanese shipping company MOL. The vessels will be engaged in a 20-year free-on-board off-take of approximately 800,000 tons per year of LNG sourced from U.S. Gulf liquefaction projects, including the planned terminal near Freeport, Texas.

Christopher Delbrück, CEO of EGC SE, said, “These agreements are a very important step for our business. They build on our existing supply portfolio and provide further momentum, following two contracts concluded for Qatari LNG and our involvement with the Goldboro project in Canada. As gas markets in North America, Europe and Asia become increasingly interconnected, LNG will be a critical enabler for the optimization of E.ON’s group-wide asset base.”

Gulf South plans to construct an approximately 65-mile supply header to serve the liquefaction terminal near Freeport. In addition, it plans to expand and modify existing facilities in order to provide access to additional supply sources for the header with an anticipated start date in 2018. The shippers on the header will have the flexibility to source supplies from several third party pipelines directly connected to the header and access storage facilities throughout the region.

Under the contract signed with MOL, MOL will provide LNG vessels under the agreements with a capacity of 180,000 cubic metres each. It is intended that Itochu Corporation will acquire a 50 percent stake in the project from MOL at a later stage. Delivery of the vessels is expected in Q3 2018 to match the start-up of EGC SE’s FOB off-take from North America.

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Image: E.On