Noble signs up for PNG LNG

Singapore-listed commodities player Noble Group said Wednesday it will buy 1 million tonnes of liquefied natural gas per year from Papua New Guinea under a preliminary agreement with InterOil and Pacific LNG.

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 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 to Reuters.

In the last three years, several oil majors and banks have set up shop in Singapore, attracted by a favourable tax regime and its proximity to growing demand centres such as China and India