Petronas has strengthened its position in Asia’s liquefied natural gas market after signing a long-term LNG supply agreement with China National Offshore Oil Company (CNOOC), underscoring the continued importance of gas in the region’s energy transition.
Under the sale and purchase agreement, Petronas LNG Ltd. will deliver 1.0 million tonnes per annum (MTPA) of LNG to CNOOC Gas and Power Singapore Trading & Marketing, extending a partnership that has spanned years of LNG cooperation between the two state-backed energy companies.
The deal aligns with China’s stated “Dual Carbon” objectives, which target peak carbon emissions before 2030 and carbon neutrality by 2060. Natural gas, particularly LNG, is expected to play a central role in China’s strategy to displace coal while maintaining energy security amid rising power demand.
Petronas said the agreement reflects more than just incremental LNG volumes, framing it as an expansion of a broader strategic relationship with CNOOC. The Malaysian energy major has increasingly emphasized long-term contracts as a way to balance portfolio stability with Asia’s structural demand growth for cleaner-burning fuels.
China remains one of the world’s largest LNG importers, and long-term supply contracts have regained prominence after the market volatility of recent years exposed the risks of heavy reliance on spot purchases. Chinese buyers have been actively locking in LNG volumes from a range of suppliers to underpin supply security and price stability.
For Petronas, the agreement reinforces its standing as a reliable LNG supplier to North Asia at a time when competition among exporters is intensifying. The company markets LNG from an established portfolio that includes production in Malaysia and international assets, allowing it to serve customers across Asia under flexible commercial structures.
The agreement also reflects a broader trend in Asian LNG markets, where national oil companies are using long-term deals to support decarbonization goals without sacrificing reliability. While renewables capacity continues to expand across the region, gas remains a critical bridging fuel for power generation, industrial use, and grid stability.
Petronas has been actively positioning LNG as a lower-carbon solution within its broader energy transition narrative, while continuing to invest in upstream gas, LNG infrastructure, and trading capabilities. China, for its part, is expected to remain a cornerstone market for LNG demand growth over the next decade, even as it accelerates investments in renewables and nuclear power.
