This article first appeared in The Edge Financial Daily on October 26, 2017

KUALA LUMPUR: Malaysia LNG Sdn Bhd, a subsidiary of Petroliam Nasional Bhd (Petronas), has signed a heads of agreement with Jera Co Inc to supply up to 2.5 million tonnes of liquefied natural gas (LNG) annually for a period of three years from April 2018.

Jera, Japan’s biggest LNG buyer, is a joint venture between Tokyo Electric Power Co Fuel & Power Inc and Chubu Electric Power Co Inc, and is engaged in the power generation and energy supply business in Japan and overseas.

Petronas vice-president of LNG marketing and trading Ahmad Adly Alias said the deal is a testament to the strength and stability of the national oil corporation’s relationships with its partners and customers in Japan that have been built for over 30 years.

He added that in the changing LNG industry landscape, Petronas’ integrated operation has enabled the company to respond to new market requirements which include offering long- and short-term solutions.

“New demand terms and conditions are becoming a norm and providing flexible solutions to accommodate the different needs of our buyers is our way forward,” he said in a statement yesterday.

Reuters, in a report from Tokyo, said Jera’s existing 15-year long-term contract for 4.8 million tonnes per year of LNG with Malaysia LNG expires next March.

Malaysia LNG operates the Petronas LNG complex in Bintulu, Sarawak — one of the world’s largest LNG complexes operating on a single site. The nine-train facility has a combined annual production capacity of about 30 million tonnes.