SINGAPORE: Petronas has signed a deal to lease a liquefied natural gas (LNG) storage unit in the country to commodity trader Vitol for at least two years, industry sources told Reuters.
Under the agreement, Petronas will rent one of its two 200,000-cubic-metre LNG storage units at Pengerang in southern Malaysia to Vitol, the sources said, declining to be identified as they were not authorised to speak with media.
The lease is for at least two years and will likely start in the second-half of 2019, one of the sources said, adding that the other unit in Pengerang would be set aside for domestic use.
The sources did not give any other details.
Petronas did not reply to a request for comment from Reuters, and a Vitol spokeswoman said the company does not comment on commercial relationships.
The two storage units are part of Pengerang Terminal, a dedicated industrial terminal incorporated to undertake the development, construction and operation of facilities required for the handling, storage and distribution of oil and petrochemical products for the Pengerang Integrated Complex, which also houses an oil refinery.
The terminal includes regasification facilities comprising a regasification unit, the storage tanks and berths for loading and reloading LNG vessels.
Petronas Gas Berhad — majority-owned by Petronas — owns 65% of Pengerang LNG, while Malaysia’s Dialog LNG Sdn Bhd and Permodalan Darul Takzim own the rest.
Nearly all Middle East oil and gas bound for North Asia’s industrial powerhouses of China, Japan and South Korea pass through the Strait of Melaka and South China Sea. Pengerang is situated strategically in between at the southern tip of the peninsula.
Petronas LNG, a subsidiary of Petronas, and Vitol Asia signed a deal last year for long-term LNG supply from LNG Canada and from the global portfolio of Petronas, to start from 2024.