Malaysia’s Petronas gets flexible on LNG contracts

KUALA LUMPUR / Reuters

Malaysia’s state energy firm Petronas may try shorter-term LNG contracts and smaller cargo sizes to entice buyers, senior company officials said, at a time when it has major contracts coming up for renewal and the market is awash in supply.
The liquefied natural gas (LNG) marketing drive at Petroliam Nasional Berhad, or Petronas, coincides with rising production after the start-up of Train 9 at its Bintulu export terminal and its first floating LNG unit. Malaysia is the world’s third-largest LNG exporter.
The global LNG market has become a buyers’ market as growth in new supplies, mainly from Australia and the United States, exceeded demand and depressed prices. Asian spot LNG prices have dropped by more than 70 percent since 2014.
“New demand creation is becoming a norm,” Ahmad Adly Alias, vice president of Petronas’ LNG Trading & Marketing said at the Asia Oil & Gas Conference. “We have recently restructured our organization to put a lot more focus on Middle East and South Asia… We’ve also set up a team to cover Southeast Asia,” he said.
The company’s upstream chief executive officer Mohd Anuar Taib told Reuters that it sees significant potential demand growth in India, Pakistan, Bangladesh and some parts of Southeast Asia. In China, Petronas plans to work with a partner to sell smaller parcels to meet the demand of small buyers, Ahmad said. Petronas is also exploring LNG sales as a transportation fuel for trucks and ships, the officials said.