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Petronas adopts AECO price
index for spot LNG sale
PROJECTS & MALAYSIA’S state-owned Petronas has sold
COMPANIES its first spot shipment of liquefied natural gas
(LNG) using the Canada Alberta Energy Com-
pany (AECO) price index.
The company said on May 7 that the cargo
had been sold from its Bintulu LNG plant to a
buyer in the “Far East” for delivery in August.
AECO is a leading price benchmark for natu-
ral gas in Canada, with Petronas describing it as
transparent thanks to both its real-time trading
as well as its high liquidity, backed by large gas
reserves.
The state major said AECO’s introduction
was part of its plan to include additional pricing
options for its customers.
“With AECO, [an] LNG buyer has the flex-
ibility to further diversify its price exposures
from established key price indices such as Japa-
nese Crude Cocktail (JCC), Brent, Japan Korea The CAD40bn ($33bn) project is part of
Marker (JKM), US Henry Hub and UK National the Canadian government’s efforts to support
Balancing Point (NBP),” Petronas said. exports to buyers in Asia as the country seeks to
Petronas believes the sale of the AECO reduce its reliance on the US market. LNG Can-
indexed spot cargo is a significant step towards ada reached a final investment decision (FID) in
establishing a transparent price index in the October 2018 for the construction of two 7mn
LNG market that will complement both its own tonne per year (tpy) liquefaction plants in Kiti-
pricing diversification efforts as well as the start mat, British Columbia.
of commercial shipments of LNG from Canada The impending commissioning of LNG Can-
from 2024. ada in 2024 has encouraged sellers to lobby for
The Royal Dutch Shell-led LNG Canada pro- a switch from S&P Global Platts’ JKM index to
ject, in which Petronas is also a partner, is expected AECO, an unnamed Singapore-based trader
to begin exporting cargoes to Asia by then. told Reuters last week.
Japan to help develop
Philippine SPR programme
POLICY THE Philippines has reached a preliminary pandemic risks to the stability of the country’s
agreement with Japan to develop a strategic oil imports.
petroleum reserve (SPR) to help insulate the “We have been proactively seeking all poten-
Southeast Asian nation from future oil shocks. tial ways to ensure the availability of sufficient
The Philippine Department of Energy energy supply, most especially in the face of
(DOE) said on May 12 that it had signed local or global disruptions such as geopolitical
a memorandum of understanding (MoU) movements, global market volatilities, and more
with state-affiliated Japan Oil, Gas and Met- recently, this [coronavirus] COVID-19 health
als National Corp. (JOGMEC) to conduct an crisis,” he said, adding: “Today’s signing speaks
eight-month study into the creation of an oil volumes on Japan’s commitment to help the Phil-
stockpile. In addition, JOGMEC will also work ippines succeed in attaining its energy security
on updating the Philippine National Oil Con- goals.”
tingency Plan from 2002. The Philippine government, which only
Philippine Energy Secretary Alfonso Cusi started discussing an SPR strategy in 2018, is
highlighted the geopolitical, commercial and looking to one of the world’s leaders in the field.
P6 www. NEWSBASE .com Week 19 13•May•2021
