Santos, ENN to Form LNG Joint Venture

Australian producer Santos February 21 said it is in talks with Chinese ENN to establish an LNG joint venture, to be based in Singapore, that will serve the fast-growing Chinese market.

The LNG trading joint venture will focus on the increasing demand in China and internationally for LNG, give both parties increased access to LNG markets, and provide access to ENN’s Zhoushan import terminal in China.

ENN, which is also a stakeholder in Santos, is one of the largest natural gas distributors in China.

“I am very pleased to announce today that Santos and our major shareholder ENN are in discussions to form a joint venture to create an LNG portfolio to capture the huge potential of the fastest growing LNG market in the world,” Santos boss Kevin Gallagher February 21. The joint venture will be based in Singapore and is expected to be operational during the course of 2018, Gallagher said during an analyst meeting.

He also said that the ENN joint venture is a great opportunity to gain direct access to ENN's import terminal which is expected to be completed later this year. It will provide direct access to end users in the fastest growing LNG market in the world. “As China focuses very heavily on replacing coal with gas, really to provide breathable air, and reduce its emissions, we see that we'll be well placed to take advantage of that.  We look forward to finalising an agreement with ENN where we'll be able to do that,” he said.  

On building a portfolio he said, “Yes.  I see it very much baby steps initially, but we've got great trading capability here in Santos, we've built it up over many, many years, and we want to apply that to the LNG markets.  As I say with an end user like ENN as a partner, we see that as a marriage made in heaven.”