Petronas and PTT units receive approval for a new gas contract in Malaysian-Thai joint area

Malaysian state-owned energy company Petronas announced on Monday that its 'unit, along with subsidiaries of Thailand PTT's 'have received approval from both governments for the new?production share contract (PSC)?for a large gas-producing?block?in their joint area.

This approval comes at a time when Asian gas buyers are seeking greater supply security amid increased concerns about regional energy security after disruptions on global energy markets caused by tensions in Middle East.

The statement stated that PC JDA, an exploration unit of Petronas, PETRONAS Carigali and PTT subsidiary,?PTTEP JDX, as well as the Malaysia-Thailand Joint Authority, had signed agreements to create a "new contractual framework" for Block A-18-01.

The new PSC extends the development of the existing Block A-18 past the expiration date on April 20, 2029. It also incorporates an adjacent exploration area that has additional resource potential.

The Malaysia-Thailand Joint Development Area, which covers approximately 7,250 square kilometers, is made up of several gas fields with a combined production capacity of about 700 million standard cubic foot per day.

Petronas said that the parties signed a Gas Sales Agreement to ensure gas supply from the 'block' to both countries.

Ainoor Abdullah B Abdullah said, "As the key source of condensate and natural gas for both countries, this milestone reinforces?our shared commitment?to maximise value?through enhanced resource monetisation?and operational synergies?."

The new 'PSC' has a tenure of 35 years, starting January 1, 2026. It covers the Block A-18 area as well as the newly added exploration zone.

(source: Reuters)