International Swiss trading firm Vitol Group, one of the largest energy traders in the world, has stepped forward as a customer for liquefied natural gas (LNG) from the 25% share in the LNG Canada project owned by Malaysia’s state-owned Petronas.
The new export terminal, under construction on the northern Pacific coast of British Columbia, would be the primary source for a 15-year supply deal providing up to 800,000 metric tons/year (mty) of LNG, or 100 MMcf/d, the firms said Thursday.
Pricing is expected to evolve with market conditions after supplies become available from the new Kitimat terminal in 2024, with Vitol Asia Pte Ltd. picking up tanker cargos from the Petronas share of LNG production.
Vitol said the deal serves a company commitment to “long-term development of the LNG market and its evolution to become a more flexible and tradeable commodity.”
The supply agreement for gas from the LNG Canada export terminal extends until at least 2038 an LNG trading relationship with Petronas that began in 2005, Vitol said. The Malaysian firm echoed Vitol by describing the deal as “able to provide flexible solutions within a changing and evolving LNG market.”
Prices for U.S.-sourced Vitol supplies from LNG exporter Cheniere Energy Inc. are indexed to Henry Hub trading. Vitol in September Vitol Inc. inked a 15-year contract with Houston’s Cheniere for 70,000 mty of LNG.
Vitol, already the world’s largest oil trader, is “committed” to developing a long-term LNG market, Group CEO Russell Hardy said in September. “We believe that LNG has an important role to play in the future energy mix and that its evolution will require a more flexible and tradeable LNG market,” he said.