Malaysia is expected to fully attend to the domestic demand and need for liquefied natural gas (LNG) by 2016 upon the commissioning of Petroleum National Bhd’s (Petronas) two new liquefication plants in Sarawak, Malaysian Reserve reported on December 22.
The two plants are located at Bintulu and a floating LNG plant at the coastal area.
Petronas gas and power business, Malaysia gas management, GM Ezhar Yazid Jaafar said the new capacity will reduce the country’s dependency on LNG import.
“Overreliance on import has resulted in a price hike as Petronas has to procure the volumes at the international market price,” he said at a media briefing on the development of gas supply in Peninsular Malaysia yesterday.
“With these two plants coming into place, we can actually reduce the risks of uncertain global LNG price.” Currently, the global price for LNG is RM50 per unit million British thermal units (mmBtu).
“Our imports mainly come from Brunei, Nigeria and Qatar- based on short-term contracts.
Petronas, at the moment, has the capacity to provide 57% of the domestic gas production whereby LNG constitutes 15% out of it,” Ezhar said.
He said Petronas’ LNG regassification terminal (RGT) in Sungai Udang, Malacca, has a capacity of 3.8 million tonnes per annum, however, only 50% has been utilised so far.
The national oil company has also embarked on another RGT project at Pengerang, Johor, which will be part of the Refinery and Petrochemicals Integrated Development project.
Ezhar said the energy sector in Malaysia requires an average of 1,250 mmBtu to 1,300 mmBtu per day.
“The domestic price that Petronas has set for the first 1,000 mmBtu after subsidy was RM13.70 per mmscfd (million standard cu ft per day) and that will be increased by 1.52% to RM15.20 effective Jan 1, 2014. The remaining 250 mmBtu to 300 mmBtu, which is from the RGT, will be priced at RM41.68 per mmBTu,” he added.
“We want to be the hub for LNG in Asia. Currently, we are ranked No 2 in the world after Qatar in terms of global LNG producers and players,” he said.
Ezhar said Petronas aims to expand its business to India specifically as well as the region.
“Strong demand from China and India will ensure that the Asia-Pacific market remains profitable for LNG suppliers. We will definitely benefit out of it.”
Copyright: Malaysian Reserve, 2013