Malaysia’s state-owned energy company will begin supplying Guanghui starting in 2017, despite weak forecasts for LNG prices on the Asian market due to oversupply.

Guanghui signs LNG deal

China

SHANGHAI, December 10, 2015 – China LNG company Guanghui Energy announced an agreement on Wednesday to import LNG from Petronas. Malaysia’s state-owned energy company will begin supplying Guanghui starting in 2017, despite weak forecasts for LNG prices on the Asian market due to oversupply. The price and import volume of the deal were not disclosed.

The LNG will be delivered to Guanghui’s LNG terminal in Jiangsu province, which will have the capacity to store 3 million tonnes a year when completed.

China’s weakened economic growth has resulted in a 3.7% year-on-year drop to 12.8 million tonnes in the first eight months of 2015. Mild winter temperatures have also influenced the drop in imports.

LNG prices will fall amid rising output in the coming years. Asian prices for LNG have fallen by nearly two thirds since 2014, hitting $7.20 per British thermal unit on Wednesday. US research and trading company Bernstein predicts a global oversupply of around 30 million tonnes through 2018.

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