JERA Awards 20-Year LNG Supply Contract to Petronas

Malaysia's national oil and gas company has signed a deal to supply JERA Co Inc up to about 2 million metric tons per annum of liquefied natural gas (LNG) for 20 years from 2028.

"The signing of this agreement signifies the transformation from traditional point-to-point LNG supply agreements to a more flexible LNG supply arrangement, which further underscores Petronas' position as a reliable LNG supplier through the expansion of its supply capabilities", Petroliam Nasional Bhd (Petronas) said in a press release.

"LNG will be delivered using Petronas’ new generation of 174,000-cubic-meter LNG carriers, designed to comply with the International Maritime Organization’s enhanced emissions standards, supporting more efficient and lower-emission operations".

The LNG will be sourced primarily from Malaysia, Japanese integrated power company JERA said in a separate media release.

"As natural gas is increasingly being reassessed globally as an essential energy source for stable energy supply, securing reliable LNG has become even more important from an energy security perspective amid rising geopolitical risks", JERA said.

"In Japan, seasonal variability in LNG demand is also increasing due to factors such as the aging of oil-fired power plants and the growing introduction of renewable energy, heightening the need to secure flexibility in fuel supply".

"JERA will continue to build a balanced LNG procurement portfolio by incorporating supply from regions including the Middle East, Asia-Pacific, and the United States, while diversifying regional supply risks", JERA added.

"JERA will also continue to strengthen its operational capabilities to enable flexible and timely responses during periods of supply-demand tightness, reinforcing its ability to deliver stable energy to Japan".

The agreement finalizes a memorandum of understanding signed between the companies June 2025 at the Energy Asia forum in Kuala Lumpur.

At the event Petronas also signed a memorandum of cooperation on LNG with the Japan Organization for Metals and Energy Security (JOGMEC).

"The cooperation aims to ensure a stable supply of LNG under normal circumstances, while addressing sudden disruptions in LNG supply, through a strategic LNG arrangement outside of Japan, which could include exploring the utilization of LNG storage facilities in Malaysia", government agency JOGMEC said in a media release June 23, 2025.

"In Japan, LNG is the primary fuel for power generation, contributing to approximately 30 percent of the power generated", JOGMEC said. "Yet, it remains vulnerable to challenges such as geopolitics factors, weather fluctuations, and equipment malfunction".

In 2025 Petronas delivered 563 LNG cargoes including 383 from the Petronas LNG complex in the Bintulu district of Sarawak state and 41 from floating facilities PFLNG Satu and PFLNG Dua. LNG sales totaled 36.62 million metric tons, according to Petronas' annual report.

Last year Petronas and its partners began exporting from LNG Canada. On July 7, 2025 Petronas said it had shipped its first production share from the British Columbia facility to Japan.

"Strategically located on Canada’s west coast and connected to Petronas' upstream gas assets in Northeast BC, LNG Canada offers a direct and efficient shipping corridor to key north Asian markets including Japan, South Korea and China", Petronas said.

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