Petronas formalises 12-year LNG deal with China’s Shenergy


PETROLIAM Nasional Bhd (Petronas) has signed a heads of agreement (HOA) with China’s Shenergy Group Co Ltd to supply approximately 1.5 million tonnes per annum (MTPA) of liquefied natural gas (LNG) to its Wuhaogou receiving terminal in China.

Petronas said its subsidiary, Petronas LNG Ltd (PLL), signed the HOA with the LNG supply agreement for a 12-year term starting from 2022, and added the HOA also involves a shipping collaboration to construct and charter new mid-sized LNG vessels for the cargo delivery.

“Through this new long-term agreement, Petronas continues to establish itself as Shenergy’s preferred LNG solutions partner, having been a major LNG supplier to its subsidiary, Shanghai LNG Co Ltd, since 2006,” the state-run oil company said in a statement yesterday.

The new deal for additional LNG supply allows Petronas to support Shenergy’s increasing demand for LNG, while further strengthening Petronas’ foothold in one of the world’s fastest-growing LNG markets.

Petronas executive VP and CEO of gas and new energy Adnan Zainal Abidin (picture) said Petronas values the long-term relationship with Shenergy, which has continued to grow from strength-to-strength since 2006.

“The long-term LNG deal, which involves the delivery of mid-sized cargoes to unique LNG receiving terminals, is a testimony of Petronas’ commitment to customer-centricity and market adaptability.

“This could only be achieved through Petronas’ unique business model where we customise our solutions according to our customers’ needs and requirements, especially when the market is moving toward mid-sized cargo requirements or smaller parcels of LNG,” he said.

“With a focus on providing innovative solutions to meet customer demands, Petronas continues to cement its reputation as a preferred and reliable LNG supplier,” he added.

The signing of the HOA between Petronas and Shenergy was witnessed by Petronas president and group CEO Tan Sri Wan Zulkiflee Wan Ariffin.

Petronas is the first global energy player to introduce the floating LNG concept in 2016, the PFLNG Satu, and recently named its second floating LNG vessel, the PFLNG Dua, at the end of 2019.