Regional LNG: Interoil, ENN sign agreement for LNG supply

InterOil Corporation (InterOil) and Pacific LNG Operations Ltd (Pacific LNG) said they have signed a Heads of Agreement (HOA) with ENN Energy Trading Company Ltd (ENN), for the supply of one to one and half million tonnes per annum (MTPA) of liquefied natural gas (LNG) from the Gulf LNG Project in Papua New Guinea.

The Gulf LNG Project in Papua New Guinea (PNG) comprises the Elk and Antelope gas fields and liquefaction and associated facilities in the Gulf Province of PNG to be developed by Liquid Niugini Gas Ltd, InterOil and Pacific LNG's joint-venture project company.

The HOA, while not binding, provides exclusivity on the LNG volumes for ENN, during negotiation of the definitive agreement. The HOA sets out the basis upon which the parties intend to negotiate and document terms for the purchase and sale of between 1.0 and 1.5 MTPA of LNG for a period of 15 years commencing in 2015.

InterOil and Pacific LNG have a target to complete negotiations and execute a binding Sales and Purchase Agreement (SPA) with ENN by the second quarter of 2012.

?We are pleased to have executed an additional HOA for long-term LNG off-take from our Gulf LNG Project in Papua New Guinea. InterOil is proud to work with ENN, the largest independent natural gas distribution company in the Peoples Republic of China,? InterOil Chief Executive Officer Phil Mulacek said.

ENN operates piped gas projects in over 100 cities in China with a total connectable urban population of 49 million. With 3.3 to 3.8 MTPA now under HOA?s, and SPA discussions underway, InterOil believes it has industry support for its Gulf LNG project.

ENN serves approximately 22 thousand industrial, and commercial customers with 780 million cubic feet per day of installed capacity, and 6 million households, by its 11 thousand mile gas pipeline network. (romel)