Kuala Lumpur, July 7, 2021 - Petronas, through its subsidiary Petronas LNG Co., Ltd., signed a 10-year LNG supply agreement with CNOOC Power Group Co., Ltd., a subsidiary of CNOOC. (leaders of both parties attending the signing ceremony from the fourth to the seventh from the left are: Mr. Zhang Rongwang, deputy general manager of CNOOC, Mr. Shi Chenggang, chairman of CNOOC, Mr. ezran, executive chairman of Petronas LNG Co., Ltd. and Mr. Shen Shanrui, vice president of liquefied natural gas marketing and trade of Petronas)

The long-term supply agreement also includes the supply of LNG from Canada, and the project will begin operation in the middle of this decade.

The 10-year agreement involves the supply of 2.2 million tons of LNG per year, linked to the Brent and Alberta energy company (AECO) index. The transaction is valued at approximately $7 billion. "Petronas is honored to strengthen our stable relationship with CNOOC for more than ten years through this transaction. This transaction reflects that the market accepts and recognizes that LNG priced by AECO index has entered the world's largest LNG market, and helps promote the use of LNG as a cleaner and more economical energy." Shen Shanrui, vice president of PetroChina LNG marketing and trade business, commented.

The AECO index on ice NGX commodity exchange is one of the most liquid spot and futures energy markets in North America. This index is the main price indicator of natural gas in Canada, similar to Henry hub in the United States, which is the natural gas price benchmark of LNG pricing index. Petronas sold a ship of spot goods from Bintulu, Malaysia, linked to the AECO index to buyers in the Far East in May this year.

Petronas has reached an agreement with CNOOC, China's largest importer of LNG, which reflects Petronas's commitment to ensuring stable supply and providing customers with additional pricing options through the established transparent and stable price index (such as AECO index) in the LNG market. Once its Canadian LNG project is ready, it will pave the way for Petronas to provide LNG with low-temperature chamber gas emissions to major demand markets in Asia.

The transaction also further strengthened the long-term friendly relationship established between the two sides since 2006, reflecting Petronas' commitment to supporting CNOOC and its subsidiaries to meet their rapidly growing clean energy needs and supporting China to achieve carbon peak and carbon neutralization goals.

About "carbon peak" and "carbon neutralization"

At the two sessions in 2021, carbon peak and carbon neutralization were written into the government work report for the first time, and became "hot words" discussed on behalf of the committee members. China has put forward solemn goals and commitments such as "strive to reach the peak of carbon dioxide emissions by 2030 and strive to achieve carbon neutrality by 2060". "Carbon peaking" refers to the gradual decline of carbon dioxide emissions from high after reaching the highest value.

"Carbon neutralization" means that enterprises, groups or individuals calculate the total amount of greenhouse gas emissions directly or indirectly within a certain period of time, and then offset their own carbon dioxide emissions in the form of plant afforestation, energy conservation and emission reduction, so as to achieve "zero emission" of carbon dioxide.

As a progressive energy and solution partner, enrich life and shape a sustainable future. Petronas always adheres to the concept of environmental protection in the development process, and has set the goal of achieving net zero carbon emission by 2050. Petronas looks forward to walking hand in hand with global partners to create the future.