Petronas signs a 20-year LNG Supply Deal with QatarEnergy

QatarEnergy has agreed to supply Petronas with 2 million metric tonnes of LNG per year in a deal lasting 20 years. This will help meet the country's increasing gas demand despite its dwindling gas reserves.

Qatar signed a 27-year LNG deal with Japan in the last week, and this deal was the first long-term LNG supply agreement between the two nations.

Petroliam Nasional (Petronas) is pursuing new investments in natural gas fields abroad, and is seeking partnerships with foreign companies to increase extraction. It also seeks LNG import deals due to the falling reserves of local reserves.

Petronas released a statement saying that the long-term LNG volumes will be a "critical" factor in strengthening Malaysia's energy security and ensuring reliable, stable supply to meet Malaysia's growing demand.

Malaysia, which is the fifth largest LNG exporter in the world, will increase its imports significantly to meet rising demand for power from data centres.

Petronas signed LNG import agreements with Woodside Energy, Commonwealth LNG and Venture Global in the last few years. It is also planning to build a third regasification facility.

QatarEnergy is betting big on the massive North Field project. It's expected to produce its first LNG by the end of the year, and cement its position as the second largest LNG seller in the world.

QatarEnergy will be able to increase its output by 64%, from the current 77 mtpa. Kpler data showed that Qatar exported over 81 millions tons of fuel in 2017. (Reporting and editing by Neil Fullick in Doha, Emily Chow from Doha)

(source: Reuters)