Commodity trading company Vitol signed a binding heads of agreement with the Malaysian energy giant Petronas for a long-term LNG sale and purchase deal.
Under the terms of the agreement the LNG supply to Vitol commencing in 2024 will be approximately up to 0.8 million tonnes per annum for a period of up to 15 years on both delivered ex-ship (DES) and free on board (FOB) basis, Vitol said in its statement.
The primary supply to Vitol will come from LNG Canada as well as from other Petronas’ global LNG supply portfolio.
Shell-led LNG Canada is located in Kitimat, British Columbia, Canada with a planned initial export capacity of 14 million tonnes per annum (mtpa) of LNG from two liquefaction trains, with the potential to expand to four trains in the future.
Shell and its partners reached the final investment decision on the project at the beginning of October.
Petronas joined the venture by acquiring a 25 percent stake in the project from Shell.
Speaking of the deal with Petronas, Vitol’s head of LNG, Pablo Galante Escobar , said it will further strengthen the company’s ability to respond to market demands noting that Vitol is eyeing long-term development of the LNG market towards becoming a more tradeable commodity.