German energy company E.ON signed a 20-year deal with Gulf South Pipeline Co for shipment of natural gas for a planned export facility in Texas.
According to the deal, EGC, the trading arm of E.ON will be the shipper of liquefied natural gas (LNG) at the planned Coastal Bend
Header project near Freeport, Texas.
E.ON board manager Leonhard Birnbaum said in a statement that this transaction clearly demonstrates E.ON's long-term commitment to building out its liquefied natural gas business.
Gulf South Pipeline Co. plans to build a 65-mile transit artery to serve the planned export terminal. The company said it anticipates a 2018 start date.
E.ON has also struck a deal with Japanese shipping group Mitsui OSK Lines LTD (MOL) to transport liquefied natural gas from
the United States.
Running over 20 years, the shipping agreement includes capacity of up to two LNG vessels transporting about 800,000 tonnes of LNG from U.S. Gulf projects per year, including the planned terminal near Freeport, Texas, E.ON said.
Freeport LNG Development is to build the Texas plant capable of processing 1.8 billion cubic feet of natural gas per day for exports to countries with and without free-trade agreements with the United States.
Market observers say that the agreements help E.ON diversify its global gas portfolio, but there is also a security dimension to the deal.