(EnergyAsia, December 5 2011, Monday) — NYSE-listed InterOil Corporation and Pacific LNG Operations Ltd have signed a heads of agreement (HOA) with China’s ENN Energy Trading Company Ltd for the annual supply of one to one and 1.5 million tonnes of liquefied natural gas (LNG) from the Gulf LNG Project in Papua New Guinea.

While not binding, InterOil said the agreement provides exclusivity on the stated volumes for a period of 15 years starting 2015 during negotiation of the definitive agreement. InterOil said the parties have targeted to complete negotiations and execute a binding sales and purchase agreement (SPA) with ENN by the second quarter of 2012.

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

InterOil CEO Phil Mulacek said:

“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 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 3.8 million tonnes/year now under HOAs, and SPA discussions underway, InterOil believes it has industry support for its Gulf LNG project.”

Liquid Niugini Gas V.P. LNG, Conrad Kerr, said:

“ENN serves approximately 22,000 industrial, and commercial customers with 780 million cubic feet per day of installed capacity, and six million households, by its 11,000 mile gas pipeline network.”

InterOil Corporation is developing a vertically integrated energy business whose primary focus is Papua New Guinea and the surrounding region. Its assets consist of petroleum licences covering about 3.9 million acres, an oil refinery, and retail and commercial distribution facilities, all located in Papua New Guinea.

ENN Energy Trading Company Ltd is the subsidiary of ENN Energy Holdings Limited, which engages in gas connection, sales of piped gas, construction and operation of vehicle gas refueling stations, distribution of LPG and sales of gas appliances in China.

Pacific LNG is an affiliate of Clarion Finanz AG, a private company specialising in energy and mining investments. Pacific LNG owns an economic interest of approximately 20% in the Elk Antelope fields, 47.5 % of Liquid Niugini Gas and is a large shareholder of InterOil.