E.ON seals pipe, shipping deals to export LNG from U.S.

Author: Reuters | Feb 12 2015 at 07:11 AM | Category: Energy  Maritime  

German utility E.ON will be able to produce and export liquefied natural gas (LNG) from the United States for 20 years after signing deals on Thursday to charter tankers and receive feed gas.

Trading arm E.ON Global Commodities said it had a deal with Japan’s Mitsui OSK Lines for up to two LNG carriers.

The 20-year agreement includes capacity of up to two LNG vessels transporting about 800,000 tonnes of LNG from U.S. Gulf projects per year, including a planned terminal near Freeport, Texas, E.ON said.

It said the deal would “serve its regasification capacities in Europe and globally optimise its growing LNG portfolio,” adding the vessels were expected to be delivered in the third quarter of 2018.

It also signed a 20-year deal to buy pipeline capacity from the U.S. Gulf South Pipeline Company (GSPC) that will allow it to feed gas from inland-producing areas to the coastal liquefaction plant.

Under that agreement, E.ON will transport gas on GSPC’s yet-to-be-built Coastal Bend Header, a 65-mile pipeline serving the liquefaction plant due to start in 2018.

Customers of the new line will be able to source gas from several third-party pipelines and access storage facilities throughout the region, E.ON said.

The moves come after E.ON last year secured export rights from the planned Freeport LNG terminal, which it acquired from Japanese utility Osaka Gas, industry sources said.

The company declined to comment on whether it has the right to export LNG from Freeport.