Malaysia's Petronas to restart operations at LNG terminal by Q1 2024

MALAYSIA’S national oil company Petroliam Nasional aims to restart one of its liquefied natural gas (LNG) terminals currently under force majeure by the first quarter of 2024, a senior company executive said on Wednesday (Apr 12).

“Our plan is to complete the work by Q1 2024,” said Shamsairi Ibrahim, vice president of LNG marketing and trading at the company, known as Petronas. The facility’s restart is subject to approval from local authorities, he said.

In October, Petronas declared a force majeure on gas supply to Malaysia LNG Dua due to a pipeline leak caused by soil movement at its Sabah-Sarawak Gas Pipeline.

The company aims to complete an investigation into the gas supply disruption by mid-2023.

The disruption had fuelled fears of a supply shortage to customers, including Japanese utilities, but Petronas has said it would continue efforts to provide alternative supplies.

In an interview with Reuters, Shamsairi also reiterated Petronas’ wish to extend its long-term contracts with its Japanese customers, adding that discussions are ongoing.

Petronas has long-term supply contracts with Japanese gas distributors such as Tokyo Gas and Osaka Gas, some of which are due to expire this year and next.

Japan, Malaysia’s top client, imported 12 million tonnes of LNG in 2022, up 19 per cent from 2021, according to Japan’s trade data.

“Not only (supplies from) Bintulu, but it is our aspiration to get a bit more (supplies) from Canada to Japan,” he said, referring to the LNG Canada project in Kitimat, British Columbia, in which Petronas has a 25 per cent equity stake.

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The first phase of the project, set to be Canada’s first LNG export terminal, is expected to begin shipments around 2025.

On its project in Argentina with state firm YPF, LNG supplies from there could go to markets like Europe and Asia if the project is realised, added Shamsairi.

The companies expect to make a final decision next year on whether to invest in the first phase of the US$60 billion project.

“Europe is one of the markets we cannot ignore. Other than that, we potentially can bring it back to Asia Pacific,” he said. “Asean also will be good, if it is economical to do that.” REUTERS