SYDNEY: Energy giant Exxon Mobil Tuesday said it had finalised an agreement to supply Japan's Osaka Gas from its 15 billion US dollar liquefied natural gas project (LNG) in Papua New Guinea.

United States-based Exxon said the contract was for the supply of about 1.5 million metric tonnes of LNG a year from the development for 20 years, bringing the conditionally approved project closer to realisation.

"We are pleased to have entered into this important agreement with a leading LNG customer in Japan and to have started a new relationship with Osaka Gas," said LNG marketing vice president Ron Billings, in a statement to investors.

"The PNG LNG project will provide a clean-burning supply of natural gas to help meet growing energy demand in Japan."

Exxon said Osaka was a major energy supplier in Japan, servicing 6.9 million customers and purchasing 7.4 million tonnes of LNG in 2008.

Exxon and partners -- Australia's Santos and Oil Search, Japan's Nippon Oil and Eda Oil, owned by PNG's government -- approved the project on December 8, conditional on securing two more sales contracts, including with Osaka.

Oil Search told Australian investors the partners expected to sign the final sales agreement, with Taiwan's state-owned CPC Corp, in early 2010.

Potentially the largest-ever such deal for PNG, analysts have said the Exxon development could double the impoverished Pacific country's income.

Binding contracts have already been signed for the sale of a combined 3.8 million tonnes per year from the project to China's Sinopec and Tokyo Electric Power Co in Japan.