Malaysia LNG Sdn Bhd (MLNG), a subsidiary of PETRONAS, today signed a Memorandum of Agreement (MOA) with The Tokyo Electric Power Company Inc. and Tokyo Gas Company Ltd. to supply up to 7.4 million tonnes per annum of Liquefied Natural Gas (LNG) for 15 years beginning 2003. The agreement comes with an additional five-year supply extension option. At current prices, the contract is worth about US$20 billion for the duration of 15 years.
The MOA will effectively renew the existing 7.4 million tonnes per annum 20-year contract between MLNG and the two Japanese power and gas utility companies signed in 1983, marking another milestone in the long-term relationship between MLNG and the two buyers. The agreement also serves as a testimony to MLNG and Malaysia’s reputation as a stable, reliable and competitive LNG supplier.
Under the renewed contract, a quantity of up to 5.6 million tonnes per annum of LNG will be supplied on ex-ship basis by LNG tankers owned by Malaysia International Shipping Corporation Berhad (MISC), a subsidiary of PETRONAS, from the Bintulu LNG Complex in Sarawak to the receiving terminals of Tokyo Electric and Tokyo Gas in Tokyo Bay, Japan. The balance of up to 1.8 million tonnes per annum of LNG will be transported on free-on-board basis using LNG tankers currently being built by Tokyo Electric and Tokyo Gas.
In preparation for the delivery starting from 2003, MLNG and MISC have undertaken extensive measures involving plant rejuvenation and ship refurbishment to ensure the continuation of smooth and reliable supply of LNG to the buyers.
Tokyo Electric and Tokyo Gas are the pioneer buyers of LNG from Malaysia. Tokyo Electric is the biggest electricity provider in Japan, supplying power in the Tokyo metropolitan area and eight of its surrounding prefectures. Tokyo Electric buys about 16.6 million tonnes of LNG per year, or about 29 per cent of Japan’s total LNG import. Tokyo Gas, on the other hand, is the largest city gas company in Japan, supplying gas in the Tokyo metropolitan area and five of its surrounding prefectures. Tokyo Gas buys about 6.9 million tonnes of LNG per year, which is about 12 per cent of Japan’s total LNG import.
Malaysia is currently the world’s third largest LNG supplier. The Bintulu LNG Complex houses the MLNG and MLNG Dua plants. The third plant, owned by MLNG Tiga Sdn Bhd, will come on stream in phases beginning from early next year. With a combined capacity of about 23 million tonnes per year, and together with ancillary facilities which include six LNG storage tanks and two loading jetties, the Bintulu LNG Complex is set to become the world’s largest LNG production facility from a single location. The integrated operations of the three plants, supported by a current fleet of 13 LNG tankers and with additional six vessels under construction, will enhance Malaysia’s LNG supply flexibility and reliability.
At the MOA signing ceremony held in Kuala Lumpur today, MLNG was represented by its Managing Director and CEO Encik Abdullah Karim. Tokyo Electric was represented by its Director, Mr Kazuo Takasaka and Tokyo Gas by its Managing Director Mr Mitsunori Torihara. Tan Sri Dato’ Seri Azizan Zainul Abidin, Chairman of MLNG and also the Chairman of PETRONAS, was also present.
Media Relations and Information Department