Petronas inks first Canadian-indexed LNG deal
Malaysian state Petronas LNG (PLL) said May 7 it had introduced a new LNG pricing index based on the AECO gas trading hub in Canada. It had just sold a spot LNG cargo to an Asian buyer for delivery in August.
Petronas said the sale of the spot cargo based on AECO pricing is a significant step towards establishing a transparent price index in the LNG market to not only complement Petronas’ pricing diversification for cargoes but also for the supply of LNG from the Anglo-Dutch Shell-led LNG Canada project. It said it is due to start commercial deliveries in 2024.
|
Advertisement: The National Gas Company of Trinidad and Tobago Limited (NGC) NGC’s HSSE strategy is reflective and supportive of the organisational vision to become a leader in the global energy business. |
Petronas is one of five partners in the LNG Canada project; its estimate that commercial deliveries from the 14mn mt/yr first phase are expected in 2024 is a more precise operational date than the mid-decade estimate previously provided by the consortium.
The introduction of AECO is part of Petronas’ plan to include additional pricing option for its customers, allowing them to enjoy its associated benefits. With AECO, LNG buyers now have flexibility to further diversify their price exposure from established key price indices such as Japanese Crude Cocktail (JCC), Brent, Japan Korea Marker (JKM), US Henry Hub and UK National Balancing Point (NBP).
“As a customer-centric LNG solutions provider, we continuously seek to provide customised solutions in meeting our customers’ energy demand, whilst offering them a competitive pricing structure,” PLL CEO Ezran Mahadzir said.
AECO is the leading gas trading hub in western Canada, and like the Henry Hub in the US it is traded in real time, with high liquidity backed by large gas reserves.