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Germany's E.ON Expands U.S. LNG Exposure

Units of Germany's E.ON have struck pipeline and shipping deals for the liquefaction and transport of U.S. gas in support of the company's global liquefied natural gas (LNG) business.

Dusseldorf-based E.ON Global Commodities SE (EGC SE) and Mitsui O.S.K. Lines Ltd. (MOL) made a 20-year deal for free-on-board shipping capacity. And Chicago-based E.ON Global Commodities North America LLC (EGC NA) struck precedent agreement to ship natural gas on the planned Coastal Bend Header Project for liquefaction on the U.S. Gulf Coast, the company said.

EGC SE is the energy trading arm of E.ON and is involved in regasification terminals across Europe. EGC NA is the E.ON group entity responsible for the trading and marketing of North American power and natural gas.

"These agreements are a very important step for our business," said EGC SE CEO Christopher Delbruck. "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. As gas markets in North America, Europe and Asia become increasingly interconnected, LNG will be a critical enabler for the optimization of E.ON's group-wide asset base.”

The yet-to-be-built Coastal Bend Header is a project of Gulf South Pipeline Co. LP (see Daily GPI, Sept. 10, 2014). EGC would be a foundation shipper on the pipeline. EGC NA will be responsible for the 20-year supply of feed gas to be purchased free-on-board by EGC SE as LNG, E.ON said.

EGC SE's shipping agreement is for capacity of up to two LNG vessels with MOL. The vessels will be engaged in a 20-year free-on-board offtake of 800,000 tons per year of LNG sourced from U.S. Gulf Coast liquefaction projects, including the planned Freeport LNG terminal in Texas (see Daily GPI, Oct. 30, 2014).

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