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China’s ENN Group Co. Ltd. is set to acquire 11.7% of Santos Ltd., Adelaide.

ENN has arranged to buy Hony Capital’s interest in Santos worth $750 million. It will make ENN Santos’ largest shareholder.

Santos said it has agreed to transfer the shares to ENN under the terms of the subscription agreement entered into at the time of Santos’ capital raising in 2015.

The two companies also agreed that Hony would become a strategic investor in ENN through a private placement of new shares, worth $380 million, in support of ENN’s plans for growth in natural gas.

ENN is a private gas distributor in the growing Chinese market as well as a known industry player in Australia.

It operated a network of 576 LNG and compressed natural gas refuelling stations and distributes 1.88 million tonnes/year of LNG—about 20% of the LNG trade in China by volume.

The company also is constructing China’s first private LNG receiving terminal in Zhoushan in Zhejiang Province to receive imported gas. The facility will have a capacity of 3 million tpy when the first phase is complete in 2018 and there will be room for further expansion.

The Santos share move, subject to ENN shareholder approval, is ENN’s first exposure to the upstream side of the gas business and is consistent with its aim of developing into a vertically integrated combine.

Tag(s) : #Oil and Gas News
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