Cheniere Energy Partners LP’s Sabine Pass Liquefaction LLC said it is in talks to potentially provide bi-directional liquefied natural gas (LNG) capacity at its Sabine Pass LNG terminal in Cameron Parish, LA, to a company that would distribute the gas in China.

Under a memorandum of understanding (MOU) with ENN Energy Trading Co. Ltd. the parties have agreed to talks for ENN to contract capacity for a primary term of 20 years with possible extensions, subject to regulatory and other approvals for the construction of liquefaction facilities at Sabine Pass. ENN could contract for 1.5 million metric tons per year of bi-directional LNG processing capacity at the terminal, Cheniere said.

Earlier this week Cheniere announced a similar MOU with Morgan Stanley Capital Group Inc. (see Daily GPI, Nov. 9). Cheniere is pursuing the development of liquefaction capability at the import terminal, which would allow it to export gas produced in the United States as LNG (see Daily GPI, Sept. 13; Aug. 20). If the project goes forward, Sabine Pass would be the only permanent LNG export facility in the Lower 48.

ENN is a subsidiary of ENN Energy Holdings Ltd. and is one of the largest independently owned natural gas operators in China. Through its gas distribution business ENN has obtained rights for delivering piped gas in more than 80 cities in 15 provinces across China with a combined connectible urban population of approximately 45 million, Cheniere said.

“ENN Energy Trading is an ideal customer that is expanding its natural gas distribution network and seeking new sources of natural gas supply in order to increase its customer connections and increase its sales volumes,” said Cheniere CEO Charif Souki.

According to Cheniere, ENN facilities are connected to about five million residential, commercial and industrial customers and the company is seeking supplies in order to connect additional customers residing in the provinces in which it has rights to distribute gas.

“ENN Energy is anticipating an estimated 30% increase in sales growth over the next several years,” Cheniere said. “ENN Energy plans to build as many as two LNG receiving terminals in China and is in the process of obtaining approvals from the administrative authorities for its identified sites.”

©Copyright 2010Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.