TOKYO, Oct 31 (KUNA) -- China, the world's second biggest energy user, has reached a USD 25 billion agreement to buy liquefied natural gas (LNG) from Malaysia over 25 years to meet rising demand, state media reported Tuesday.
The deal, signed in July, was formally announced by Chinese Premier Wen Jiabao and Malaysian Prime Minister Abdullah Ahmad Badawi after their meeting on Tuesday, said the China Daily. Wen and Badawi had the bilateral meeting on the sidelines of the China-Association of Southeast Asian Nations (ASEAN) Commemorative Summit taking place in the Southern Chinese city of Nanning.
The LNG will supply Shanghai, where China National Offshore Oil Corp (CNOOC) and its partner Shenergy Group are building a receiving terminal for the fuel, Petroliam Nasional Bhd (Petronas), the daily said.
According to the 25-year contract, which is Petronas' first LNG deal with China, the LNG supply will grow year-by-year to 3 million tons in 2012 and delivery will be kept stable at that level.
The Malaysian company draws its natural gas supplies from the Bintulu region, one of the world's largest LNG production bases, in east Malaysia. Petronas has an annual LNG output of 23 million tons and mainly supplies countries like Japan and South Korea, the report said.
CNOOC is leading the push for LNG terminal construction along the eastern coast amid China's efforts to diversify the nation's energy supply and alleviate its heavy reliance on coal and oil. The company said earlier it had signed master agreements for LNG spot cargoes with Suez SA, Total SA and Shell Eastern Trading (Pte) Ltd. this month.
