TOKYO�Malaysia LNG Tiga Sdn. Bhd. (MLNG Tiga) has signed a confirmation of intent (COI) with a consortium of three Japanese customers�Tokyo Gas Ltd., Toho Gas Co Ltd., and Osaka Gas Co Ltd. Under terms of the COI, MLNG Tiga will supply up to 1.6 million tonnes/year of LNG for 20 years beginning in 2004.
"The price is set based on the market prices at that time," said Petronas Pres. Hassan Marican, "but based on today's market price, it's about $6 billion."
The LNG will be supplied from Malaysia's third LNG plant at Bintulu, Sarawak. The plant is scheduled to come on stream in late 2002. Within 2 years of start-up, it will have a capacity of 6.8 million tonnes/year.
This is the fourth COI signed between MLNG Tiga and its future customers to date. MLNG Tiga's three other COIs were signed with customers in Japan and India.
Cumulatively, the four COIs involve 5.7 million tonnes/year of LNG. Hassan says he is confident that the plant's remaining 1 million tonnes/year of output will be taken up shortly.
The product will be delivered to the consortium members' respective LNG receiving terminals in Japan using LNG tankers owned by Malaysia International Shipping Corp. Bhd., a subsidiary of Petronas, the Malaysian national oil and gas company.
Tokyo Gas, Toho Gas, and Osaka Gas are among Japan's largest city gas companies, with extensive natural gas distribution networks serving over 16 million household and industrial customers. These companies are currently receiving LNG from Malaysia's two existing LNG plants at Bintulu under 20-year contracts.
MLNG Tiga is a joint venture of Petronas (70%), the Sarawak state government (10%), Nippon Oil LNG (Netherlands) BV (10%), and Shell Gas BV (10%). The new plant, located adjacent to the two existing LNG facilities, will boost Malaysia's total LNG production to 23 million tonnes/year and transform Bintulu into the world's largest LNG production site.