Malaysia LNG Tiga Sdn Bhd, a subsidiary of PETRONAS, today signed a sale and purchase agreement (SPA) with Korea Gas Corporation (KOGAS) to supply up to two million tonnes per annum (mtpa) of liquefied natural gas (LNG) for seven years to the South Korean LNG importer. At current price, the contract is valued at about US$3.2 billion.
The LNG will be delivered to KOGAS beginning from this month from MLNG Tiga’s plant, which is Malaysia’s third LNG production facility at the PETRONAS LNG Complex in Bintulu, Sarawak. The LNG will be shipped by tankers owned by Malaysia International Shipping Corporation Bhd to KOGAS’ receiving terminals in Incheon, Pyeong Taek and Tong Young in South Korea.
KOGAS, whose current customers include Korea Electric Power Corporation and city gas companies, is already importing up to two million tonnes of LNG annually from Malaysia, supplied under a 20-year contract with Malaysia LNG Sdn Bhd. The LNG for this contract is sourced from Malaysia LNG Dua Sdn Bhd’s plant.
MLNG Tiga is a joint venture between PETRONAS (60 per cent), the Sarawak State Government (10 per cent), Shell Gas Holdings (Malaysia) Ltd. (15 per cent), Nippon Oil LNG (Netherlands) BV (10 per cent) and Diamond Gas Netherlands BV (five per cent). The MLNG Tiga plant comprises two liquefaction trains with an annual production capacity of 3.4 million tonnes each. The first train came on stream in March while the second train is scheduled to begin commercial operations by October 2003.
The PETRONAS LNG Complex in Bintulu, which was officially opened yesterday by Prime Minister Dato Seri Dr Mahathir Mohamad, is set to become by October the world’s largest integrated LNG facility at a single location with a combined production capacity of about 23 million tonnes per year. Apart from the two-train, 6.8 mtpa MLNG Tiga plant, the Complex also houses the three-train, 8.1 mtpa Malaysia LNG Sdn Bhd plant, as well as the three-train, 7.8 mtpa MLNG Dua plant.
The SPA signed with KOGAS today is the fifth supply contract concluded by MLNG Tiga. With this contract, MLNG Tiga has now committed about six million tonnes of LNG annually to buyers from Korea and Japan . The company is currently in the midst of discussion and negotiation with other potential buyers for the remaining output of the plant.
At the SPA signing ceremony held in Kuala Lumpur today, MLNG Tiga was represented by its Chairman Tan Sri Dato’ Mohd Hassan Marican, who is also the President and Chief Executive Officer of PETRONAS. KOGAS was represented by Dr Kim Myung-Kyu who is its Chairman, President and Chief Executive Officer.
Media Relations & Information Department