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PETRONAS LNG Ltd (PLL) introduced the Canada Alberta Energy Company (AECO) index as a new LNG price indexation to its customers following the sale of a spot LNG cargo from Bintulu, Malaysia, to a buyer in Far East for August 2021 delivery.
AECO is a leading price benchmark for natural gas in Canada, similar to the US’ Henry Hub, which is the natural gas price benchmark used as indexation to LNG price. It is transparent as the index is traded in real-time, with high liquidity backed by large gas reserves.
The introduction of AECO is part of PETRONAS’ plan to include additional pricing option for its customers, allowing them to enjoy its associated benefits. With AECO, LNG buyer has the flexibility to further diversify its price exposures from established key price indices such as Japanese Crude Cocktail (JCC), Brent, Japan Korea Marker (JKM), US Henry Hub and UK National Balancing Point (NBP).