Petronas to supply Jera with LNG for 3 years


Malaysia LNG Sdn Bhd (MLNG) has signed a heads of agreement with Jera Co Inc to supply around 2.5 million tonnes of liquefied natural gas (LNG) every year for three years.

The Petroliam Nasional Bhd’s (Petronas) subsidiary will provide the LNG starting April 2018.

Petronas LNG marketing and trading VP Ahmad Adly Alias noted the agreement is a testament to Petronas’ relationship with buyers built for over 30 years.

“At Petronas, we value these relationships and remain steadfastly committed to delivering a reliable supply of gas to these partners and customers,” he said.

The LNG will be sourced from the LNG facility in Bintulu, Sarawak, one of the world’s largest LNG complexes.

The nine-train facility can produce 30 million tonnes of LNG per annum.

Currently, Jera has an existing 15-year-long contract with MLNG to buy as much as 4.8 million tonnes of gas annually that will expire in March 2018.

Jera specialises in power generation and energy supply in Japan and overseas, and is a joint venture between Tokyo Electric Power Co Holdings Inc and Chubu Electric Power Co Inc.

Ahmad Adly noted that Petronas’ integrated operation has allowed the company to acknowledge new market requirements, especially due to the shift in the LNG industry landscape.

“New demand terms and conditions are becoming a norm, and providing flexible solutions to accommodate the different needs of our buyers is our way forward,” he added.

The progress of the Pengerang Integrated Complex is not affected by the pricing of LNG in the past three years and the officiation of its two key facilities will only see higher petro-chemical demands.

Earlier in March, the alliance of Japan, India, South Korea, China and Taiwan has placed bigger pressure on the biggest LNG exporters.

There has been a demand for flexibility in purchase contract terms, such as having resell rights.

Due to its absence in domestic energy sources, Japan accounts for a third of the world’s 260 million tonnes LNG export market, marking the nation as the world’s biggest importer.