Malaysia Will See Strongest LNG Production Growth In Short And Medium Term, Says BMI

KUALA LUMPUR, Sept 27 (Bernama) -- BMI, a unit of Fitch Solutions, expects Malaysia to see the strongest liquefied natural gas (LNG) production growth in the short and medium term when feed gas supplies from greenfield gas projects become available.

It said the startup of two key natural gas projects in 2024 raised the outlook for Malaysia’s LNG production, including SapuraOMV Upstream Sdn Bhd, the operator of the Jerun gas field in Block SK408W, where it announced first gas production in July 2024.

BMI said the Jerun gas project is expected to produce about 550 million standard cubic feet per day (mmscfd) or 5.7 billion cubic meters (bcm) of natural gas during peak production.

“The economic life of the field is expected to be until 2050. Shell and Petronas are other partners of the Jerun gas project with each holding 30 per cent,” it said in a note today.

However, BMI also anticipates upside risks to Malaysia’s LNG exports due to the projected increase in LNG production from the Bintulu plant.

It said Malaysia has been unable to produce LNG at its nameplate production capacity due to the lack of adequate feed gas supply for LNG production at the Bintulu plant.

Malaysia is currently committed to exporting 12 million tonnes per annum (mtpa) of LNG annually under 18 long term LNG sale contracts, of which six are expiring between 2024 and 2025.

“It remains to be seen whether Malaysia will renew all contracts with Japanese buyers, who are cutting LNG imports in response to a structural decline in LNG demand.

“However, a potential decline in LNG exports from Indonesia could help Malaysia to ramp up exports and claim larger market shares across Asian markets,” BMI said. 

-- BERNAMA