SINGAPORE: Malaysia's state-owned Petroliam Nasional Bhd said on Friday it had signed its first liquefied natural gas (LNG) deal using a Canadian pricing indexation as basis.
Petronas LNG sold a spot LNG cargo to a buyer in the Far East for August delivery using the Canada Alberta Energy Company (AECO) index, the company said.
AECO is a Canadian natural gas price benchmark, similar to the Henry Hub index in the United States, but is not typically used as a pricing basis for LNG spot contracts. In Asia, the S&P Global Platts' Japan-Korea-Marker (JKM) has been increasingly used as pricing basis in spot contracts.
But with Royal Dutch Shell's massive LNG Canada export project in British Columbia which is currently under construction and expected to produce first LNG in 2024, there is a push by sellers to price cargoes off the AECO price index, a Singapore-based trader said.
LNG Canada is a joint venture between Shell, Petronas, PetroChina Co Ltd, Mitsubishi Corp and Korea Gas Corp.