Regional LNG: Petronas secures $20 billion LNG deals with TEPCO, Tokyo Gas

Malaysia's state-owned oil and gas company Petroliam Nasional Bhd. (Petronas), on Monday had signed LNG deal to supply Tokyo Electric Power Co. (TEPCO) and Tokyo Gas Co. with the value of more than US$ 20 million, agencies reported.

Petronas said its unit, Malaysia LNG Sdn Bhd (MLNG), had agreed to supply up to 7.4 million tonnes per year of LNG to TEPCO and Tokyo Gas for 15 years starting next month. The agreement comes with an additional five-year option.

At current prices, the contract is worth about $20 billion, it said.

Another Petronas subsidiary, MLNG Tiga Sdn Bhd, agreed to supply TEPCO up to 540,000 tonnes of LNG, also from April. The duration of the contract is one year, which may be extended if agreed by both parties, Petronas said in a statement.

The long-term contract would replace the current 20-year agreement expiring at the end of this month.

Under the new contract, up to 5.6 million tonnes of LNG will be supplied by tankers owned by Malaysia International Shipping Corp, a unit of Petronas. The balance will be transported by tankers owned by TEPCO and Tokyo Gas.

MLNG, Malaysia's first LNG project, currently produces 8.1 million tonnes of LNG per year.

MLNG Tiga plant is scheduled to commence operation by end of this month, with a 6.8 million tonnes per year capacity.

Petronas is expanding its Bintulu facility in the eastern state of Sarawak to about 23 million tonnes per year, making it the largest LNG production facility in the world.

Petronas said MLNG Tiga is in various stages of discussions with several other potential buyers for its remaining production output. (*)