Malaysia’s state-owned Petroliam Nasional Berhad, aka Petronas, has struck a $7 billion liquefied natural gas (LNG) supply deal with China National Offshore Oil Corp. (CNOOC) that includes cargoes from the LNG Canada facility currently under construction in British Columbia.

Under the terms of the deal, Petronas would supply 2.2 million metric tons per year (mmty) of LNG to CNOOC for a term of 10 years. The supplies are to be indexed to a combination of the Brent crude and Canadian AECO natural gas benchmarks.

Petronas Vice President of LNG Marketing & Trading Shamsairi M. Ibrahim said the deal “reflects the markets’ receptiveness and recognition of AECO-indexed LNG into the world’s largest LNG market.”

The announcement comes as long-term LNG supply deals are seen...