Petronas will supply more than three million metric tonnes of natural gas annually to China‘s Shanghai LNG Company, the Malaysian firm said in a statement on Tuesday.
The value of the contract is estimated to be worth $25 billion based on current prices over the next 25 years, Malaysia’s New Straits Times online news site said in a report.
“This is Petronas first LNG deal with China. The deal will further enhance the economic ties between the two countries,” the oil and gas producer said.
The deal was unveiled by Abdullah Ahmad Badawi, Malaysia’s prime minister, and his Chinese counterpart Wen Jiabao on the sidelines of the China-Asean summit in Nanning.
Petronas said the LNG would be delivered from the Petronas LNG complex in Bintulu, Sarawak to Shanghai LNG’s receiving terminal at Zhong Ximentang Island, in Zhejiang Province.
Shanghai LNG is a joint venture company between Shenergy group, which owns 55 per cent of the company, and CNOOC Gas and Power, which owns the remaining 45 per cent.
CNOOC Gas and Power is a wholly-owned subsidiary of China national offshore oil corporation.