Petronas inks 10-year LNG supply deal with China’s CNOOC

Malaysian energy giant Petronas said it has entered into a ten-year LNG supply deal with a unit of China National Offshore Oil Corporation (CNOOC).

This long-term supply agreement with CNOOC Gas and Power Trading & Marketing also includes supply from the Shell-led LNG Canada project, according to a statement by Petronas on Wednesday.

The firm has a stake in the giant LNG export facility under construction in Kitimat and scheduled to start operations by the middle of the decade.

Petronas said it would supply 2.2 million tonnes per annum of LNG, indexed to a combination of the Brent and Alberta Energy Company (AECO) indices.

It revealed earlier this year it had signed its first LNG supply contract linked to the Canadian gas price index.

The Malaysian energy giant said the new term deal with CNOOC has a price tag of about $7 billion over ten years.

Furthermore, Petronas VP of LNG marketing and Trading, Shamsairi M. Ibrahim, said the new deal strengthens the decade-long relationship between the two firms.

“Importantly, it reflects the markets’ receptiveness and recognition of AECO-indexed LNG into the world’s largest LNG market, as we seek to grow the use of LNG as a cleaner and cost-effective form of energy,” he said.

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