SHANGHAI -- A Shanghai terminal will begin receiving LNG (liquefied natural gas) supply from Malaysia as of 2009 with the annual delivery no less than 1.1 million tons, said the Shenergy Group here on Monday.

According to a contract with the term of 25 years, the supply will grow year-by-year to three million tons in 2012 and then the delivery will be kept stable.

The contract, inked by the Shanghai LNG Co. Ltd and a subsidiary of Petronas, Malaysia's national petroleum corporation,is so far the largest trade contract between the two countries, marking the beginning of the energy cooperation.

Shanghai LNG Co. Ltd is a joint venture co-funded by the Shenergy Group and a wholly owned subsidiary of CNOOC (China National Offshore Oil Corporation), with Shenergy taking 55 percent of the shares.

The Malaysian company draws its natural gas supplies from the Bintulu region, one of the world largest LNG production base in east Malaysia. The company boasts an annual LNG output of 23 million tons and supply mainly to the countries like Japan and the Republic of Korea.

The terminal for the Shanghai LNG project is located in the Yangshan Deepwater Port, Shanghai International Shipping Center.