Australian exploration and production company Woodside has signed a heads of agreement (HOA) with Chinese energy company ENN for the sale of one million tonnes of liquefied natural gas (LNG) per annum for a period of ten years.

The supply of LNG will start in 2025 using gas sourced from the Scarborough field in Woodside’s portfolio, located offshore Western Australia. Woodside became the operator of the field in March 2018.

Woodside CEO Peter Coleman said: “This HOA demonstrates market support for Woodside’s proposals to expand the Pluto LNG facility and develop the Scarborough offshore gas resource as part of our vision for the Burrup Hub in Western Australia.”

The HOA was signed at the 19th International Conference & Exhibition on Liquefied Natural Gas (LNG2019) event in Shanghai and builds on a cooperation agreement signed in 2018. Under this agreement, Woodside and ENN expressed their commitment to working together, with the goal of exploring a wider range of potential business opportunities.

The companies intend the strategic partnership to help them pursue growth phases, including ENN’s efforts to grow its market shares in national and international gas retailing and distribution sectors.

In a speech at LNG2019, ENN CEO Zhang Yesheng said: “The fast-growing LNG demand in China is consistently driven by the ‘coal to gas’ policy, the requirement for quality industrial development and the call for actions to protect blue sky, clear water and clean soil.

“For a long period of time in the future, China will be the market with the highest LNG growth in the world.”

The HOA remains conditional upon a final investment decision (FID) on the Scarborough field, as well as the negotiation and execution of a fully termed sales and purchase agreement.