InterOil and ENN sign Heads of Agreement for liquefied natural gas supply

Source: InterOil Corporation

InterOil Corporation (NYSE: IOC) ("InterOil") and Pacific LNG Operations Ltd. ("Pacific LNG") announced the signing of a Heads of Agreement (HOA) with ENN Energy Trading Company Ltd. ("ENN"), for the supply of one to one and one half, million tonnes per annum (mtpa) of liquefied natural gas (LNG) from the Gulf LNG Project in Papua New Guinea.

The Gulf LNG Project in Papua New Guinea (PNG) comprises the Elk and Antelope gas fields and liquefaction and associated facilities in the Gulf Province of PNG to be developed by Liquid Niugini Gas Ltd., InterOil and Pacific LNG's joint-venture project company.

The HOA, while not binding, provides exclusivity on the LNG volumes for ENN, during negotiation of the definitive agreement, and sets out the basis upon which the parties intend to negotiate and document terms for the purchase and sale of between 1.0 and 1.5mtpa of LNG, for a period of 15 years commencing in 2015. InterOil, Pacific LNG, and ENN have a target to complete negotiations and execute a binding Sales and Purchase Agreement (SPA) with ENN by the second quarter of 2012.

InterOil Chief Executive Officer Phil Mulacek commented, "We are pleased to have executed an additional HOA for long-term LNG off-take from our Gulf LNG Project in Papua New Guinea . InterOil is proud to work with ENN, the largest independent natural gas distribution company in the Peoples Republic of China . ENN operates piped gas projects in over 100 cities in China with a total connectable urban population of 49 million. With 3.3 to 3.8mtpa now under HOA's, and SPA discussions underway, InterOil believes it has industry support for its Gulf LNG project."

Liquid Niugini Gas V.P. LNG, Conrad Kerr , commented, "ENN serves approximately 22 thousand industrial, and commercial customers with 780 million cubic feet per day of installed capacity, and 6 million households, by its 11 thousand mile gas pipeline network. We are excited to begin a long-term relationship with this rapidly growing, end user customer."

For the most up to date and in-depth information on the LNG market visit PennEnergy's comprehensive Research area to access industry focused Reports.

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