Malaysian state-owned oil company Petronas has signed an agreement with Shanghai-based Shenergy Group to supply 1.5 million tonnes per annum (mtpa) of liquefied natural gas (LNG).

Under a Heads of Agreement (HOA) signed on January 20 between Petronas subsidiary Petronas LNG and Shenergy Group Company Limited (Shenergy), approximately 1.5 mtpa of LNG will be delivered each year to Shenergy’s Wuhaogou receiving terminal in China.

The LNG supply agreement is for a 12-year term starting from 2022. It 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 said that it continues to establish itself as Shenergy’s preferred LNG partner, having been a major LNG supplier to its subsidiary, Shanghai LNG, since 2006.

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

“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,” comments Petronas executive vice president and Chief Executive Officer of Gas & New Energy, Adnan Zainal Abidin.

He said that this was achieved through the Petronas business model where it customizes solutions according to its customers’ needs and requirements, especially when the market is moving towards mid-sized cargo requirements or smaller parcels of LNG.