OSLO (Reuters) - Equinor and Global Petro Storage (GPS) have entered into a long-term agreement to build and operate a terminal and storage facility for liquefied petroleum gas (LPG) in Malaysia, the Norwegian company said on Thursday.
Oil and gas firm Equinor will bring LPG to the terminal at Port Klang, expected to start operating in mid-2021, to sell into Malaysia and other Asian markets including Bangladesh, the Philippines, India, Indonesia and Vietnam, it said.
"Malaysia is an attractive market and we believe that we will be a competitive supplier to the wholesalers of LPG into the domestic market," Equinor's Vice President for Products and Liquids Molly Morris said in a statement.
"The terminal and storage are also strategically located for blending and selling to other growing markets in the region," she added.
The company declined to disclose the value of the deal.
Equinor plans to source the LPG from the North Sea, North Africa, the Middle East and Australia. The 135,000 cubic metre-capacity terminal could handle 1.5 million tonnes of LPG per year, a company spokeswoman told Reuters.
Annually, Equinor sells about 8 million tonnes of LPG, about half of which it produces itself and the rest it procures from others, she said.
Equinor said its operations already account for around 10 percent of global waterborne LPG volumes.
As part of the agreement, Equinor will have an option to acquire a share of the new storage facility and terminal, of which it will be the only user. It declined to give details of its potential ownership of the terminal.
The International Energy Agency (IEA) said in March it expected demand for petrochemical feedstock including LPG to rise over the coming years, driven by demand for products from fertilisers to plastics and beauty products.
(Reporting By Ole Petter Skonnord, aditional reporting by Nerijus Adomaitis; Editing by Terje Solsvik and Jan Harvey)