KL, Japan seal gas deal

KL, Japan seal gas deal

KUALA LUMPUR (AFP): Malaysia's Petroliam Nasional Bhd. (Petronas) has sealed a 20-year deal to supply liquefied natural gas (LNG) to a Japanese city, officials said.

Under the agreement signed Wednesday, Petronas' unit, Malaysia LNG Sdn. Bhd., will supply up to 152,000 tons of gas each year for the duration of the contract, earning the national oil corporation an estimated 900 million ringgit (US$360 million) over the 20-year period, based on current LNG prices.

"The cargo will be delivered to the new receiving facilities and terminal being constructed in Sendai," said Azizan Zainul Abidin, chairman of Petronas and Malaysia LNG.

Sendai is a city 350 kilometers (217 miles) north of Tokyo with a population of one million.

The gas will come from Petronas' LNG-2 plant in Bintulu, Malaysia's eastern Sarawak state, which this year came onstream to supplement the company's first plant LNG-1, Azizan said.

The combined output of both plants is currently 10 million tons a year, with supply expected to surge to 16 million tons a year when LNG-2 is fully operational next year.