Released on = December 2, 2006, 3:26 am

Press Release Author = RNCOS

Industry = Energy

Press Release Summary = China has emerged as a buyer of LNG (Liquefied Natural Gas),
after it signed an array of deals and set purchasing frameworks. Therefore,
signaling its willingness to accept higher prices.

Press Release Body = Petroliam Nasional Bhd, Malaysia’s national oil company
signed a deal in October this year (2006) to supply LNG to Shanghai for the next
twenty-five years (starting from 2009). The company plans to, initially, deliver 1
Million Metric Ton a year, rising to 3 Million Ton year on year after 2012.

China’s emergence as a rising importer of LNG is expected to encourage
increased investment in this sector, say industry experts. China has demonstrated
its desire to pay increased prices, owing to soaring oil prices in world market, and
ensure that there’s enough gas supplies in the country. Most industry
observers believe that despite China’s willingness to buy LNG at higher
prices, increased prices of LNG will keep the market tight in Asia.

Long-term LNG contracts are priced in a sliding scale indexed to oil price. At US$
60 a barrel for oil, Shanghai contract with Petronas will imply paying nearly US$ 6
for 1 Million British thermal units, measure for natural gas. To be precise, around
double of what China had paid 3 years ago.

As per a Research Analyst’s view at RNCOS, who has recently researched a
report on “Future Outlook for Global LNG Market (2010)”, the long-term
contract of China for LNG has begun in 2006. The country is already having a
long-term contract with Indonesia and Australia. Now, it has entered a deal with
Malaysia. In near future, China is aiming towards African countries to attain
further growth.

Report Highlights include:

- Atlantic LNG market is growing at faster pace as compared to Asia-pacific market.
- Role of Middle East is rising rapidly, as LNG importer.
- Japan & Korea were the largest importers of LNG in 2005.
- Current trends in market performance.
- Growth sectors and factors driving change.

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