European oil company Total has agreed to supply 500,000 tonnes a year of LNG for a decade to China's privately-run ENN Group, the latest in a string of deals by Chinese firms to stock up on the fuel.
Supplies of the super-chilled natural gas will start in 2018 upon completion of ENN's planned receiving facility near the eastern coastal city of Zhoushan, Total said on Feb. 4 in a statement on its website.
Beijing is freeing up the nation's LNG trade as part of broad reforms that allow private companies to invest in oil and gas exploration as well as pipelines and tank farms, and to import and export.
The aim is to help secure supplies while boosting competition and efficiency in an energy sector long dominated by state firms.
ENN Group, the parent company of Hong Kong-listed ENN Energy Holdings, signed a preliminary deal last month to buy a further 500,000 tonnes of LNG a year over 10 years from Chevron Corp's giant Gorgon project in Australia.
Peer Huadian Green Energy Co is also considering buying 1 million tonnes of the fuel from Chevron, from 2020 to 2030.
The delivery window for all three deals in the 2020s is timed to coincide with an expected uptick in Chinese gas consumption, analysts say.
With multi-billion dollar investments in major LNG export plants now coming to fruition, Sinopec, PetroChina and CNOOC face having to juggle large supply commitments as domestic demand sours, forcing them to consider unloading supply onto already saturated global spot markets.
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