May 17, 2018 / 8:02 AM / 3 months ago

UPDATE 1-ENN seeks commissioning cargo for China's first private LNG import terminal

* Terminal likely to be ready in 2 months - company official

* Commissioning cargo is for mid-June - source

* Chinese companies setting up LNG terminals to meet demand surge (Adds details)

By Jessica Jaganathan

SINGAPORE, May 17 (Reuters) - Chinese gas distributor ENN is seeking a commissioning cargo for the country’s first privately owned liquefied natural gas (LNG) import terminal, three industry sources said on Thursday.

The cargo is for delivery in the middle of June, one of the sources said.

ENN’s Zhoushan terminal in China’s eastern Zhejiang region, with a capacity of 3 million tonnes per year, will likely start operations in two months, a senior company official told Reuters, declining to be named as he was not authorised to speak with media.

“We are aiming to (start) the terminal in the second half of the year and are in the final stages now,” the source said.

ENN has signed long-term deals including sales and purchase agreements with Chevron Corp and Australia’s Origin Energy and also has an agreement to buy LNG from Total . The deals total about 1.5 million tonnes per year of LNG.

China overtook South Korea as the world’s second-largest LNG importer in 2017 with imports of 38 million tonnes, 46 percent higher than the year before. The imports soared after the government ordered millions of homes to switch to natural gas and electric heating from coal to counter rising air pollution.

To meet the higher demand and to reduce their dependence on supply from state-owned companies, Chinese companies are building their own LNG terminals to import the fuel directly.

Guangzhou Gas Group, a local government-backed gas distributor and a major supplier to Guangzhou province, plans to build a 2 million-tonnes-per-year receiving terminal at the port of Nansha by 2020.

State-run Sinopec Corp operates three LNG receiving terminals at the ports of Qingdao, Beihai and Tianjin, each with a import capacity of 3 million tonnes per year.

Since the first LNG terminal in Guangdong province opened in 2006, China’s state-owned companies now operate over 50 million tonnes of annual import capacity.

Reporting by Jessica Jaganathan; Editing by Richard Pullin and Christian Schmollinger

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