Global law firm Herbert Smith Freehills said it has advised China’s energy major ENN on its acquisition of Toshiba’s US-based LNG unit.
On Thursday, Toshiba said it has decided to withdraw from the US LNG business transferring all the outstanding shares of Toshiba America LNG Corporation to a third-party buyer, declining to name the buyer before the transfer arrangement is completed.
However, the media soon reported the buyer was the Chinese privately-owned gas distributor ENN Group, and the Herbert Smith Freehills statement came as a confirmation of the reports.
ENN has acquired the rights to a 20-year liquefaction tolling agreement with Texas-based Freeport LNG from Japan’s Toshiba Corporation, guaranteeing access to around 2.2 million tonnes of US LNG each year.
The transaction is also the first investment by a private Chinese company in the US LNG market and is subject to regulatory approvals, the law firm said.
“China’s consumption of LNG is rising dramatically year on year as it switches to cleaner sources of power,” said partner Hilary Lau, who led the Herbert Smith Freehills team advising ENN.
Located on the Texas coast, Freeport LNG project will export over 15 million tonnes of LNG per annum once it comes fully online in the third quarter of 2019.
To remind, ENN Group recently commissioned the first phase of its Zhoushan LNG import terminal and is aiming to grow its market share in China’s gas distribution and retailing sector, as well as internationally.
The Chinese company has also ordered an LNG bunkering vessel at the compatriot shipbuilder Dalian Shipbuilding Industry Company (DSIC).