Singapore commodities firm Noble Group will buy 1 million tonnes of liquefied natural gas a year from Papua New Guinea under a preliminary agreement with InterOil Corp and Pacific LNG, the Singapore-listed firm said on Wednesday.
Noble said the heads of agreement, which is a non-binding document, sets out the basis on which the three parties intend to conclude terms for the purchase and sale of LNG for a period of 10 years starting 2014.
The deal will be InterOil’s first offtake agreement for supplies from its Gulf LNG project in Papua New Guinea.
InterOil, a smaller independent developer, has yet to attract traditional long-term buyers for LNG, Asian utilities, who are typically conservative buyers and generally prefer sellers with a long track record of delivery.
“(LNG production) is traditionally dominated by the multi-nationals and the national oil companies,” said Tony Regan, an analyst with Tri-Zen International in Singapore.
In the last three years, several oil majors and banks have set up shop inSingapore, attracted by a favourable tax regime and its proximity to growing demand centres such as China and India.
