Oil report

UPDATE 1-China's ENN seeks LNG in 10-year purchase tender, first supply in 2022

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SINGAPORE, March 31 (Reuters) - ENN LNG (Singapore) Pte Ltd, a unit of private Chinese gas distributor ENN Group, has issued a tender seeking liquefied natural gas (LNG) for 10 years starting in 2022, a trading source with direct knowledge of the matter said.

In what would be the firm’s largest long-term tender, ENN LNG sought between 500,000 and 1 million tonnes of the super-chilled fuel a year, with prices benchmarked over Brent oil on a China-delivered basis, the source said.

The tender comes at a time when long-term LNG contracts are being negotiated at record low prices amid an expected increase in supply from new projects.

ENN is the first private Chinese firm to own and operate a major LNG receiving terminal, located in Zhoushan in eastern China’s Zhejiang province, just south of Shanghai.

After connecting to the provincial gas grid last year, the Zhoushan terminal is able to handle 5 million tonnes of the fuel a year, up from an initial designed receiving capacity of 3 million tonnes a year, the source added.

ENN’s LNG handling volume is also set to rise as it gains window slots to import via other terminals under the newly established PipeChina, an entity launched last October to broaden companies’ access to energy infrastructure previously controlled by state oil majors. (Reporting by Chen Aizhu; Editing by Himani Sarkar and Richard Pullin)