KL, Japan sign LNG deal

KL, Japan sign LNG deal

KUALA LUMPUR (Reuters): Petronas's Malaysia LNG Tiga signed a $6 billion deal on Tuesday to supply up to 1.6 million tons of liquefied natural gas (LNG) to three Japanese end users.

Malaysia LNG Tiga, a 70 percent subsidiary of national oil company Petronas, signed a confirmation of intent to supply the LNG to Tokyo Gas Co Ltd, Toho Gas Co Ltd and Osaka Gas Co Ltd for 20 years beginning in 2004.

"The price is set based on the market prices of that time, but based on today's market price it's about $6 billion," Petronas president Hassan Marican told a news conference.

The LNG will be supplied from Malaysia's third LNG plant located in Bintulu in Sarawak state on Borneo island. The plant is scheduled to come on stream in late 2002.

The plant will have a total capacity of 6.8 million tons per year which Hassan said would only be reached about two years after startup.

The contract was Malaysia LNG Tiga's fourth confirmation of intent and gave it commitments to supply up to 5.7 million tons per year.