Malaysian state oil firm Petroliam National Bhd (Petronas) has inked a more than 80 billion Malaysian ringgit ($26.4 billion) deal extending the supply of gas to Gas Malaysia Bhd for another 10 years.
The new supply agreement, which has the option to extend for another five years, is one of the requirements for Gas Malaysia to list on the local bourse this year, a source close to the deal told Reuters on Thursday.
"The value of the 10-year contract is worth more than 80 billion ringgit," the source said, declining to be named due to the sensitivity of the contract value.
"It helps to lock in the gas supply Gas Malaysia needs to provide its customers. This will ensure they have the recurring income stream to satisfy their proposed listing," the source added.
The deal will ensure supply of up to 534,143 gigajoules, which is equivalent to 492 million standard cubic feet per day (MMScfd) of natural gas, until the end of 2022, Gas Malaysia said in a statement on Thursday.
The new contract will replace the existing gas supply agreement due to expire on Dec. 31 of this year, which involved supply of 382 MMScfd, it said.
The additional 110 MMScfd will enable Gas Malaysia to expand its supply to new customers, the company added.
The proposed listing of Gas Malaysia was delayed to the second quarter of 2012 from an original plan for the fourth quarter of 2011, its major shareholder MMC Corp Bhd said in a stock exchange filing on Feb. 17.
