Petronas secures US LNG deal, lays groundwork for regional tie-up with Eni

Malaysia’s state-owned energy giant Petronas has inked two agreements: a liquefied natural gas (LNG) sale and purchase agreement (SPA) with the U.S.-based Commonwealth LNG and a joint venture framework agreement (JVFA) for a proposed business combination with Italy’s energy major Eni.

The first deal, signed through its subsidiary Petronas LNG, is said to mark a key milestone in the Malaysian giant’s strategy to diversify its LNG portfolio through long-term supply from the United States.

Under the SPA, Petronas will purchase 1 million tonne per annum (mtpa) of LNG for 20 years from Commonwealth LNG plant currently under development in Cameron, Louisiana.

Shamsairi M Ibrahim, Vice President of LNG Marketing and Trading at Petronas, said: “This agreement underscores Petronas’ commitment to fostering global partnerships that ensure reliable, sustainable and long-term LNG supply for our customers. Collaborating with Commonwealth LNG will expand our supply node and strengthen our presence in the global LNG market.”

Located on the west bank of the Calcasieu Ship Channel, the pre-FID Commonwealth LNG project is set to have five 50,000-cubic-meter (cbm) storage tanks, accommodating vessels up to 216,000 cbm. Days ago, Japan’s JERA inked a 20-year agreement with Commonwealth LNG, also for 1 mtpa of LNG.

Next, the framework agreement with Eni forms the basis for the creation of a new business combination between the two heavyweughts by setting forth the key principles of the shareholder agreement. The JV is meant to manage a combination of selected upstream interests in Indonesia and Malaysia.

The new company is envisaged to be established and operated as a financially self-sufficient entity in which both partners would have a 50% stake. It is meant to support both organizations’ future gas and LNG aspirations.

The deal follows the memorandum of understanding entered into previously by the two firms. At the time, the duo said it aims to create opportunities for growth in both countries, enabling it to become a major LNG player in the region.

Eni’s CEO Claudio Descalzi commented: “This is another significant step towards the new company that Eni and PETRONAS have agreed to create across Indonesia and Malaysia, generating synergy in terms of assets, expertise and financial capabilities, in a transformational model that further strengthens the huge potential of the two countries. 

“The new company will have a strong regional impact on gas production, bringing additional energy, infrastructures and employment for the benefit of both Indonesia and Malaysia. The new company will also have the opportunity to further build on an amazing, combined portfolio of more than 50 TCF of additional, low risk exploration potential.”

The proposed joint venture is expected to deliver up to 500,000 barrels of oil equivalent per day (boepd) of what Eni says will be sustainable production of mainly gas, in the medium term. Additionally, it will combine approximately 3 billion barrels of oil equivalent (boe) of reserves with an additional 10 billion boe of potential exploration upside.

Definitive agreements are set to be finalized by the end of 2025, with the transaction completion expected to follow suit, subject to regulatory, governmental and partners’ approvals in both countries.

Eni said the new business combination will be strategically aligned to the satellite model already pursued by the company in the upstream sector with the creation of Var Energi in Norway and Azule Energy in Angola.

The two deals come on the heels of a small field asset production sharing contract (SFA PSC) Petronas signed with Seascape Energy for Temaris cluster. The PSC was awarded under the Malaysia Bid Round 2025 (MBR 2025).