KUALA LUMPUR: Petroliam Nasional Bhd (Petronas) subsidiary Petronas LNG Ltd has secured a deal to supply liquefied natural gas (LNG) worth RM29bil to CNOOC Gas and Power Trading & Marketing Ltd, a unit of China National Offshore Oil Corp (CNOOC).

       The long-term supply agreement also includes supply from LNG Canada when the facility commences its operations by middle of the decade, Petronas said.

       The deal is for 2.2 million tonnes per annum (MTPA) for a 10-year period, indexed to a combination of the Brent and Alberta Energy Co (AECO) indices. The term deal between Petronas and CNOOC is valued at about US$7bil (RM29bil) over 10 years, it said in a statement.

       “Petronas is proud to strengthen its decade-long relationship with CNOOC through this term LNG supply.

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       “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, ” said Petronas vice-president of LNG marketing and trading, Shamsairi M. Ibrahim.

       The AECO index, housed on the ICE NGX commodity exchange platform, is one of the most liquid spot and forward energy markets in North America.

       It is the leading price marker for natural gas in Canada similar to the United States’ Henry Hub, which is the benchmark for natural gas prices used as an indexation to LNG prices.

       Petronas introduced the AECO index to its customers in May this year following the sale of a spot cargo from Bintulu to a buyer in the Far East.

       The agreement with CNOOC, China’s largest LNG importer, 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. — Bernama