PETRONAS and JERA Extend Long‑Term LNG Supply Agreement into the 2040s
On 3 November 2025, Petroliam Nasional Bhd. (PETRONAS) and JERA Co., Inc. announced the signing of a new long‑term liquefied natural gas (LNG) supply contract that will keep their partnership active well into the 2040s. The agreement, formalised in Tokyo, builds on a relationship that began when Malaysia exported its first LNG cargo to Japan in 1983.
Key Terms of the Agreement
- Volume: Up to ~2 million tonnes of LNG per annum (MTPA) delivered by PETRONAS LNG Ltd. (PLL), a wholly owned subsidiary of PETRONAS.
- Duration: 20 years, with deliveries commencing in 2028 and running through 2048.
- Shipping: LNG will be transported on PETRONAS’ new‑generation 174,000 cubic‑meter LNG carriers, which meet the International Maritime Organization’s (IMO) 2023 greenhouse‑gas reduction standards.
- Flexibility: The contract moves away from a strict point‑to‑point model toward a more adaptable supply arrangement, allowing both parties to respond to market fluctuations and evolving demand patterns.
Historical Context and Strategic Importance
The original PETRONAS‑JERA LNG trade dates back to 1983, when the first Malaysian LNG shipment arrived at Japan’s Negishi terminal. Over the ensuing four decades, the partnership has supplied a steady stream of gas that has underpinned Japan’s industrial growth and residential heating needs. According to the Japan Ministry of Economy, Trade and Industry (METI), LNG accounted for roughly 37 % of Japan’s primary energy mix in 2023, making secure, long‑term contracts a cornerstone of the nation’s energy security strategy.
By extending the agreement to 2048, PETRONAS reinforces its role as a reliable supplier to one of the world’s largest LNG importers. JERA, which operates a portfolio of LNG‑fired power plants totalling more than 20 GW, gains contractual certainty that supports its capacity planning and aligns with Japan’s Seventh Strategic Energy Plan (2021), which seeks to balance energy security, economic efficiency, and environmental stewardship.
Operational and Environmental Considerations
The new LNG carriers incorporated into the contract feature hull designs and propulsion systems that reduce fuel consumption by up to 15 % compared with conventional vessels, thereby lowering CO₂ emissions per tonne‑mile transported. These ships also comply with IMO’s Tier III NOₓ limits and are equipped with exhaust gas cleaning systems to meet sulphur‑oxide (SOₓ) caps.
PETRONAS has highlighted that the contract will be administered through its integrated commercial framework, which leverages real‑time market data, predictive analytics, and a dedicated risk‑management team. This approach enables the company to tailor delivery schedules and volumes to JERA’s evolving operational requirements while maintaining the high reliability that has defined the partnership for decades.
Leadership Perspectives
Datuk Adif Zulkifli, Executive Vice President and CEO of PETRONAS’ Gas & Maritime Business, remarked:
“We value the strong partnership we have built with JERA over the decades, based on mutual trust and a shared focus on reliability. We look forward to building on this foundation as we continue to support Japan’s evolving energy needs.”
Ryosuke Tsugaru, Senior Managing Executive Officer and Chief Low‑Carbon Fuels Officer at JERA, added:
“In an increasingly dynamic LNG market characterised by rising demand, supply‑security concerns, price volatility and shifting consumption patterns, PETRONAS remains focused on providing reliable and tailored solutions that strengthen our partners’ energy security while advancing their decarbonisation ambitions.”
Why This Agreement Matters
The renewed PETRONAS‑JERA contract exemplifies how long‑term LNG arrangements can adapt to contemporary energy transitions. By securing a flexible, lower‑emission supply chain, both companies contribute to:
- Enhanced energy security for Japan, reducing reliance on spot‑market volatility.
- Support for Japan’s climate goals, as the contract enables a gradual shift toward cleaner‑burning gas while renewable capacity expands.
- Reinforcement of PETRONAS’ reputation as a trustworthy, technically capable LNG provider in Asia’s competitive gas market.
As Asia’s demand for cleaner energy continues to grow, partnerships grounded in decades of operational experience—such as the one between PETRONAS and JERA—will remain vital in delivering stable, responsibly sourced natural gas that bridges the gap toward a lower‑carbon future.
