In a statement this morning, EWC said the MoU followed several months of talks with numerous Chinese parties.

Due to confidentiality reasons, EWC said the potential customer did not want to be named. But it did say its business activities included investing in and operating power plants, coal mines and natural gas development or production.

The company said it would start supplying the LNG following the commissioning of its two production facilities in south Sulawesi, Indonesia, each of which would start up with a 500,000 tonne capacity.

Further negotiations are expected to start next month towards a final agreement, which EWC hopes would see it supply of 3-5 million tonnes of LNG per year for between 15 and 20 years.

“We have known for some time that the demand for LNG in China and the South-East Asian region far exceeds current supply,” EWC executive chairman and chief executive Stewart Elliot said.

“It is clear from discussions with the Chinese that they would like us to expand the planned output from the LNG plant we have ordered and are building … of what we plan will eventually be a 5 million tonne LNG production facility.”

Stewart said the company expected Chinese demand for LNG would grow as the country converted more of its coal and diesel power generation to gas.

Last week, EWC raised $A100 million, via the placement of 200 million shares, to fund the development of the Sulawesi LNG plant and another in the Philippines, as well as expanding its Sengkang power plant in Indonesia.