E.ON to export natural gas to Coastal Bend Header project

E.ON Global Commodities (EGC), the energy trading arm of E.ON, has signed an agreement to ship natural gas to Coastal Bend Header project.

The 20-year deal with Gulf South Pipeline Company will see EGC supply feed gas to be purchased free-on-board by it as liquefied natural gas (LNG).

Gulf South intends to build a 65-mile supply header to serve the liquefaction terminal near Freeport.

The company is also aiming to expand and renovate existing facilities in order to provide access to additional supply sources for the header.

It is expected to commence in 2018, subject to the required regulatory approvals.

The shippers on the header will be allowed to source supplies from various third party pipelines directly linked to the header and access storage plants across the region.

EGC has also signed a 20-year agreement for shipping capacity of up to two LNG vessels with Japanese shipping firm MOL.

The vessels will be engaged in a 20-year free-on-board off-take of about 800,000 tons per year of LNG sourced from US.

MOL will provide LNG vessels under the agreements with a capacity of 180,000 cubic metres each.

IItochu is expected to buy a 50% interest in the project from MOL at a later stage. The vessels are expected to be delivered in the third quarter of 2018.

EGC CEO Christopher Delbrück said: "These agreements are a very important step for our business. They build on our existing supply portfolio and provide further momentum, following two contracts concluded for Qatari LNG and our involvement with the Goldboro project in Canada."