Page 9 - AsianOil Week 41 2021

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reserves, combined with power curbs in the Gas purchases have soared, meanwhile, amid
industrial sector that cut into fuel demand, took a deepening power supply crunch that has left
a toll on crude oil imports,” Reuters quoted SIA around two-thirds of the country rationing its
Energy senior director Seng Yick Tee as saying. power. Despite gas prices reaching record highs,
The government’s crackdown in April, the government has directed the country’s
meanwhile, has put persistent downwards importers to ramp up their purchases regardless.
pressure on demand. The central government Privately owned ENN Natural Gas signed this
has not only focused on teapot crude quota week a new long-term LNG supply agreement with
trading but has also extended its gaze to the the US’ Cheniere Energy that will see the latter supply
state majors’ non-compliant crude supply to 900,000 tonnes per year (tpy) of the fuel for 13 years
independent refiners. from July 2022 on a free-on-board (FOB) basis.™

ENN seals long-term LNG

supply deal with Cheniere

PROJECTS & CHINESE utility ENN Natural Gas has signed While China’s demand for LNG has been
COMPANIES a new long-term liquefied natural gas (LNG) increasing steadily, consumption is set to skyrocket
supply agreement with the US’ Cheniere Energy. in the coming months amid a deepening power
The Chinese company said on October 11 supply crunch. The country is grappling with coal
that Cheniere had agreed to supply 900,000 and gas shortages that have left two-thirds of the
tonnes per year (tpy) of the fuel for 13 years country’s provinces rationing power.
from July 2022 on a free-on-board (FOB) basis. China’s coal-to-gas transition has created
Cheniere said the purchase price was indexed to an imbalance within the power sector, leading
the Henry Hub price and included a fixed lique- to soaring coal prices that have left power gen-
faction fee. erators unwilling to operate at full capacity. The
The US company’s president and CEO, Jack government has long banked on a shift to clean-
Fusco, said the sale and purchase agreement er-burning gas to help fulfil its pledge to hit peak
(SPA) was a “milestone” in its efforts to sign carbon emissions by 2030 and achieve carbon
long-term supply contracts ahead of its final neutrality by 2060.
investment decision (FID) on the third stage of ENN chairman Wang Yusuo: “China is
its Corpus Christi LNG export terminal on the making great efforts to achieve the goal of peak
Texas Gulf Coast. The FID is expected in 2022. carbon emissions and carbon neutrality, boost-
Fusco said: “This SPA underscores the ing the reform of the natural gas market, and
strength of the global LNG market today, par- accelerating the structural adjustment of energy
ticularly in China.” consumption.”
China is widely expected to overtake Japan The executive added that he expected the two
this year as the world’s largest importer of LNG, companies to develop a strategic relationship that
having imported 76.1mn tonnes of the fuel in the would allow ENN to provide its clients with “high
12 months to June 30. This figure was up 19.6% quality resources and services, and to make positive
year on year from the 63.6mn tonnes of imports efforts to the realisation of peak carbon emissions
recorded in the previous 12-month period. and carbon neutrality in China”.™

Week 41 14•October•2021 www. NEWSBASE .com P9