UPDATE 2-TNK-BP inks 2-year Russia ESPO crude deal with Petronas

(Adds TNK-BP quote)

SINGAPORE, Feb 23 (Reuters) - TNK-BP, BP's joint venture in Russia, has signed a deal extending its ESPO blend crude sales to Petronas for two years, as the Malaysian national oil company continues to trade the popular distillates-rich grade in Asia.

The contract will take effect in the second quarter with Petronas lifting half of TNK-BP's supply, or 1-2 ESPO cargoes of 730,000 barrels from the Russian Far East port of Kozmino each month, industry sources said on Thursday.

"ESPO is going to be a major grade in the Asia-Pacific," one source said. "Petronas wants to be involved in ESPO considering that it could be a price marker in Asia."

Petronas has the option to extend the contract for a second year, one of the sources said. Price details were not available.

"We have agreed a term deal for ESPO with one of the Asian NOCs (national oil companies)," Jonathan Kollek, senior vice president for exports at TNK-BP said in London on Tuesday, but did not elaborate.

The latest deal is similar to a term contract between TNK-BP and Petronas signed last year when the Malaysian state oil firm first started regular purchases of ESPO. (Reporting by Florence Tan and Dmitry Zhdannikov in London, editing by Miral Fahmy)