ENN Ecological Holdings Co. Ltd., a subsidiary of ENN Group, will acquire Hony Capital’s 11.7% share in Santos Ltd. for US$750 million to become Santos' largest shareholder. The two companies also agreed that Hony Capital will become a strategic investor of ENN through a private placement of new shares, equivalent to US$380 million, supporting ENN’s natural gas growth plans.
The Santos share acquisition, which is subject to ENN Ecological Holdings Co. Ltd. shareholder approval, will be ENN Group’s first exposure to the upstream part of the value chain, consistent with ENN's strategy to develop into a vertically integrated international natural gas company.
The growth of the ENN Group’s natural gas sales volume by a CAGR of 47% from 2001 to 2015 has established it as the largest private natural gas company in China. It sold 11.3 billion cubic metres (423 pJ) of natural gas in 2015. It supplies natural gas to more than 12 million households in 152 cities across China and more than 56,000 industrial and commercial users. ENN operates a network of 576 liquefied natural gas (LNG) and compressed natural gas (CNG) refueling stations. It distributes 1.88 million tons of LNG annually accounting for about 20% of the LNG trade volume in China.
ENN is also building China’s first private LNG receiving terminal in Zhoushan, Zhejiang Province, to receive imported natural gas. It will have an annual capacity of 3 million tons when Phase 1 is completed in 2018, with scope for further expansion.