KUALA LUMPUR – Petronas will remain focused on liquefied natural gas (LNG) business for the long-term and is committed to maintain its leadership in the global LNG arena despite the dramatic plunge in oil prices since the middle of last year.
Petronas Executive Vice-President and Chief Executive Officer of Upstream, Datuk Wee Yeow Hin, described LNG as a “cool and sexy” industry with consistent demand.
“Demand for LNG will always be there and it is expected to triple by 2035, from 210 million tonnes in 2010 to 500 million tonnes in 2030 and reaching 600 million tonnes in 2035,” he told Bernama.
He said presently, there are about 30 LNG supply projects globally and this was expected to double to 60 projects by 2030.
“This year there are about 36 countries importing LNG and by 2030 it is expected to grow to 50 countries.
“Japan, Korea and Taiwan will remain as large and important markets but the biggest volume growth would come from India, China and ASEAN,” said Wee.
LNG supply is a big portfolio in Petronas which has developed a track record of success across every aspect of the value chain, allowing the group to take a long-term view of the business over the short-term vagaries of the market.
Wee said Petronas would focus on supply capacity, diversity, flexibility of resource and pricing, and reliability, which lends the group its competitive edge.
“We have an end-to-end expertise from resource to marketing. We are also growing our diversity of supply geographically and resource types that would provide flexibility in pricing mechanism and contract volume where demand would be uncertain,” he said, adding capacity was vital if Petronas wants to remain as a long-term global player.
Currently, Petronas has a 26 million-tonne LNG capacity and this will grow to 40 million tonnes by 2020.
“We are quite lucky because our exploration programme in the last three to four years has resulted in a lot of gas discoveries in Malaysia. Our gas reserves in Malaysia is about 70 trillion cubic feet (TCF) and we produce 2.0 TCF a year. With all the discoveries, today we have 100 TCF,” he said.
Petronas also has eight LNG trains now operating and will have another train next year.
It also has two first-in-the-world floating liquefied natural gas facility (FLNG) with production of the first drop of on-specification LNG, expected in the first quarter of next year.
“Overseas, we have LNG in Australia and Canada, where we can dispatch to various parts of the world. We have both different types of resources, conventional and unconventional. In Australia, we have coal seam gas and in Canada we have shale gas,” he added.
Wee said Petronas has the diversity that provided the group the flexibility to price its LNG and the ability to meet the varying demands from different buyers, thus ensuring its reliability as a supplier.
“As a supplier to Korea, Japan and Taiwan, we’re seen as very reliable and that gives us the edge as the preferred supplier. We also have the proximity advantage which means cheaper shipping cost,” he said.
With security of supply from a variety of sources, a spread of pricing options and flexibility in contract duration, shipping and delivery, Petronas is set to maintain its position as a key long-term LNG global supplier.
Petronas last week displayed a milestone development in its LNG capabilities during the 26th World Gas Conference in Paris which featured interactive augmented reality scale models of both its FLNG units.
More than 100 countries and 600 organisations attended the industry’s most important gathering, with delegates representing technical, engineering, strategic and commercial disciplines, participated at the five-day conference. – BERNAMA