ENERGY ASIA: Malaysia prepares for LNG imports as demand outpaces domestic supply, says Petronas CEO

Malaysia, among a prominent global LNG exporter, is preparing for a scenario where it may have to import LNG, Petroliam Nasional Bhd, or Petronas, President and group CEO Tengku Muhammad Taufik Tengku Aziz said June 17.

"We are already actually preparing for this scenario," he said at a press briefing during the Energy Asia 2025 conference held in Kuala Lumpur, Malaysia.

In Malaysia, electricity demand is growing at about 6.5% annually, and "it is not just us who has to prepare for the onset of this uptick in electricity demand," Taufik noted.

"It was also shared during a recent forum where we had CEOs of energy utilities come in, and the Prime Minister also cited north of MR 40 billion being set aside to make sure that the grid is also going to be equipped, with the influx of energy demand," he said.

Petronas, for its part, is "working to get a third regasification terminal up and running" while continuing to retain an advantaged position in East Malaysia to export LNG to its long-term partners for their energy security, he said.

Malaysia's current gas infrastructure includes two regasification terminals - one in Sungai Udang, Melaka, and another in Pengerang, Johor - both operated through Petronas subsidiary Petronas Gas Bhd.

The needs and demand centers in the Peninsula are growing. "We already enjoy the gas supply being able to be robustly sourced, not only from our fields offshore the east coast of Peninsula Malaysia, but also from our joint development area in Thailand," he added.

However, the roughly 2 Bcf/d currently delivered from there is inadequate to meet future demand, particularly non-power needs, he said.

According to him, within the next four or five years, there will likely be a growing dependence on LNG importation, he added.

"I think the government has already announced the policy to have coal capacity, and of course, as much as every other energy mix within the region, you're seeing a range of 70% to 80% of energy systems still being powered by fossil fuels...Of course, from a Peninsula Malaysia perspective, that poses a challenge," he said.

"Hence, it links to the earlier question where we're going to have to start thinking about more reliance on LNG importation," he added.

Insofar as the time frame taken from discovery to first gas, many challenges abound. This includes permitting and other local requirements, getting standards aligned, and if there are partners within upstream arrangements, whether they are PSCs or whether they are leased concessions, he said.

Every country in the region is pursuing its own goals under the fifth Industrial Revolution while contending with a growing middle class and rapid urbanization, he said.

"We are working with contractors who believe in giving a value add and help shorten this time frame...Ideally, 36 to 40 months after discovery, you should be able to plan how the layers add on and extend your plateau production," he said.

Recent finds include the Jerun, Timi, and Rosmari-Marjoram gas fields, which the company aims to fast-track to market.

In the financial year ended Dec. 31, 2024, Petronas delivered 35.7 million mt of LNG to its customers across the globe, according to the company's media release in February.

Of the total delivered, 25.13 million mt of LNG cargoes were from the Petronas LNG Complex in Bintulu, 2.17 million mt LNG cargoes from Petronas' Floating LNG facilities, PFLNG Satu and PFLNG Dua, it said.