by Ganesh Sahathevan
Petronas recently announced that it entered into a 15 year LNG sale contract with Vitol, one of
a handful of privately held oil and gas traders whose trades are so large they rival the majors (Exxon, Shell ,Chevron and others).
The deal seems odd for Petronas as a national oil company (NOC) has rights ,access and financing that the likes of Vital and even the majors can only dream of. The LNG will come from Petronas' long delayed Canadian Kitimat project, where Petronas' JV partners have rights to product in exchange for their investment.
Petronas has a 25% stake, and it is hard to understand why Petronas needs the likes of Vital to sell the LNG.Quite apart from direct contact with NOCs around the world, Petronas has trading hubs in ,among others, Singapore and the UK.
In the spirit of New Malaysia, Petronas needs to explain why this deal with Vitol is necessary.
Petronas, Vitol Asia inks LNG supply deal
OIL & GAS
Thursday, 29 Nov 20188:05 PM MYT
KUALA LUMPUR: Petronas, through its subsidiary, Petronas LNG Ltd (PLL), signed a binding heads of agreement on Oct 1, 2018, with Singapore-based Vitol Asia Pte Ltd for a long-term liquefied natural gas (LNG) supply deal.
The supply to Vitol Asia would commence in 2024 for up to 800,000 tonnes per annum with a period of up to 15 years on both delivered ex-ship and free-on-board basis.
“The primary supply to Vitol will come from LNG Canada and other PLL's global LNG supply portfolio. LNG Canada is a major LNG project located in Kitimat, British Columbia, Canada, where Petronas is one of the joint venture participants with an equity holding of 25%,” it said in a statement today.
Canada is Petronas' second largest resource holder after Malaysia, with vast unconventional oil and gas resources in North Montney.
Meanwhile, Petronas LNG Marketing and Trading Vice-President Ahmad Adly Alias said Petronas was able to provide flexible solutions within a changing and evolving LNG market due to its strong global supply portfolio.
“Petronas is pleased to sign this long-term LNG supply deal with Vitol and hopes that it will continue to enhance the long history of business collaboration with the Vitol group,” he said.
Vitol LNG Head Pablo Galante Escobar said Petronas supplied the company's first LNG cargo in 2005 and the company has now extended its LNG relationship until at least 2038.
“We are also committed to the long-term development of the LNG market and its evolution to become a more flexible and tradeable commodity.
"This supply deal with Petronas will further strengthen our ability to offer reliable and flexible LNG solutions to customers, worldwide,” he added. - Bernama
Read more at https://www.thestar.com.my/business/business-news/2018/11/29/petronas-vitol-asia-inks-lng-supply-deal/#55wsK8Bbd22d4VEm.99