Petronas and CNOOC in $7B LNG Deal

Petronas LNG Ltd has secured a 10 year deal, worth around $7 billion, to supply LNG to CNOOC Gas and Power Trading & Marketing Limited, Petronas has revealed.

The deal is for 2.2 million tons per annum, indexed to a combination of the Brent and Alberta Energy Company (AECO) indices, Petronas noted. The long-term supply agreement also includes supply from LNG Canada when the facility commences its operations by middle of the decade, the company highlighted. 

Petronas said its deal with CNOOC reflects Petronas’ commitment  to ensure security of supply through an established transparent and stable price index such as AECO in the LNG market, while providing additional pricing options for its customers. The business said the deal also further strengthens the ongoing relationship established since 2006 and reflects Petronas’ commitment in supporting the endeavor of CNOOC and its associated companies to meet the fast-growing demand for cleaner energy and support China’s national aspiration of peak emissions and carbon neutrality.

“Petronas is proud to strengthen our decade long relationship with CNOOC through this term LNG supply,” Shamsairi M. Ibrahim, Petronas’ vice president of LNG Marketing & Trading, said in a company statement.

“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,” the Petronas representative went on to say.

Back in May, Petronas LNG Ltd introduced the AECO index as a new LNG price indexation to its customers following the sale of a spot LNG cargo from Bintulu, Malaysia, to a buyer in Far East for August 2021 delivery. AECO is a leading price benchmark for natural gas in Canada, similar to the United States’ Henry Hub, Petronas highlights.

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