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Chevron signed a 10-year term supply deal with ENN to supply up
to 650,000 metric tons per annum of LNG with first delivery
expected in 2018 or in the first half of 2019, Chevron said in a
statement on Monday.
ENN is a subsidiary of ENN Energy Holding <2688.HK>, which is
one of China's largest gas distribution companies and operates
in 150 Chinese cities. The firm is also constructing a LNG
import terminal in the northeastern city of Zhoushan that is
planned to start by 2018.
Chevron expects to supply ENN through its existing LNG assets,
"including the company’s Australian LNG interests at Gorgon,
Wheatstone and the North West Shelf", the statement said.
Companies such as Chevron with the flexibility to match their
supply with customers around the world are growing in dominance.
By depending on a number of supply terminals rather than simply
one site to supply ENN, the deal may help the formation of
so-called spot market for LNG. This would help to replace the
dominant sales model of multi-year contracts from one supply
site to a buyer, said Sophie Corbeau, a research fellow at the
King Abdullah Petroleum Studies and Research Center.
"We see this as a beauty of the spot market – we have a network
of buyers where sellers are not particularly committed to one
buyer for a certain time," said Corbeau.
(Reporting by Mark Tay; Editing by Christian Schmollinger)
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